Before buying your first home on Staten Island, consider these important five (5) steps that will help you prepare to find your dream home.
The thrill of looking at all the listings available and walking through homes with your family in different areas of Staten Island like Rossville, Woodrow, and Annadale may have caused you to want to get right into the real estate market. However, being unprepared could make this experience frustrating and costly. Taking the time to establish a foundation prior to starting the process of finding a home is very important.
1. Check and Optimize Your Credit Score
Your credit score has an impact on what type of interest rate you will get when it comes to a mortgage. In addition to that, your credit score will affect how much money you have to spend on your mortgage every month for as long as you are paying on the mortgage. If you were able to improve your credit just a little bit (for example, from 680 to 700), you could potentially end up saving several thousand dollars over the course of the time you are making payments on the mortgage. Therefore, if possible, try to achieve a credit score of 740 or above. This may be difficult; however, with this level of credit score, you will have access to the most competitive rates that lenders currently offer.
- Pro Tip: Obtain a copy of your free credit report at least three months prior to submitting your application for a mortgage. Check your report for errors and dispute them. Pay off some of your outstanding credit card debt and do not open any additional lines of credit until after your home closes.
2. Save for Your Down Payment and Closing Costs
Many buyers realize that they will be required to make an initial investment toward their purchase, also known as a down payment; however, closing costs can be just as important, yet are frequently ignored by most buyers. Closing costs generally include fees such as appraisals, title insurance, lender fees, etc., and usually run anywhere from 2% to 5% of the loan amount. Therefore, for example, if you were purchasing a house in the $500,000 price range, your closing costs could potentially be as much as $10,000 or as high as $25,000.
- Smart planning: Create a separate savings account. Although a 20% down payment will avoid paying private mortgage insurance (PMI); nevertheless, there are many good financing options available to first time homebuyers in NY with down payments starting at 3-5%.
3. Get Pre-Approved for a Mortgage
A pre-approval on a mortgage, is different than a pre-qual. The pre-approval letter is based upon documentation that was reviewed by the lender and they have agreed to lend you money. When making offers in a competitive Staten Island market this is a very important step in showing the seller that you are serious about purchasing their home and can close the transaction with financing.
- The advantages: In most cases sellers do not look at other offers when there is a pre-approval letter attached to one of them. By having a pre-approval letter, it shows that you are serious about purchasing their home and have the capability to obtain financing which gives you an upper hand as compared to buyers without a pre-approval letter.
4. Define Your Needs vs. Wants
When looking at homes in Woodrow or Annadale, it is easy to focus on high-end options instead of what you really need. By understanding your “must haves,” you can narrow down your home search and be realistic about what you’ll find. To help make this process easier, create a list that includes all the things you MUST have for your needs. These may include:
- School district
- Number of bedrooms
- Commute time to work
Now create another list that represents the things you WANT. Some examples of these items include:
- Large yard
- Modern kitchen island
- Finished basement
5. Partner with a Trusted Staten Island Real Estate Agent
Navigating the numerous negotiations and inspections associated with buying a property can be intimidating. The ideal buyer’s agent will advocate for you during all phases of the home buying experience. The agent protects your best interest and provides guidance through the entire process from when you begin searching for properties in Rossville to the close.
- What to Do: Do not simply click “Contact Agent” on a real estate website as they are most likely representing the seller. Interview at least three different local buyer’s agents specializing in the Staten Island areas (Huguenot & Pleasant Plains) until you locate one that has expertise working in your desired area.
Bottom Line
In order for you to have a home purchase that is both stress free and financial stability then you need to plan thoroughly. If you take care of the five essential steps outlined above prior to purchasing your first home you will be prepared to make confident decisions when it comes time to purchase your dream home in Staten Island.
Are you planning on buying or selling a home soon? Would like some customized advice regarding the Staten Island area? I would love the opportunity to assist you through each stage of the home buying/selling process so you may feel assured with your purchase.
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