How much can I afford?
by Jacques Ambron
Nov 07, 2019 | 1056 views | 0 0 comments | 96 96 recommendations | email to a friend | print
Jacques Ambron is executive director of sales for Halstead  Forest Hills LLC.
Jacques Ambron is executive director of sales for Halstead Forest Hills LLC.
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Q: We are currently renting, but plan to start our search for a new home. How do we determine how much we can afford? We are not sure if we will buy a co-op or house.

A: Determining your qualifications for purchase depends on the type of property. The first decision you will have to make is how much cash you will be putting down.

With a house, you can put down as little as 10 percent provided you are qualified. For most co-ops, the minimum down payment can range from 20 to as much as 33 percent, depending on the building.

Next, you should consider how much you are comfortable spending monthly for housing. This would include mortgage payments, monthly HOA fees, and/or taxes. You should talk to a mortgage banker to get a pre-approval before you start your search as well. That’s it for a house or condo.

For a co-op, there’s a bit more to consider. They usually have a set of criteria that must be met. This includes your credit score, assets left after the down payment, and your debt-to-income ratio, also called DTI.

This is determined by adding your mortgage payments, HOA, and any other loans, and dividing it by your gross income. This will give you a DTI percentage.

Most co-ops look for a 28 percent debt-to-income ratio. Some co-ops are okay if it’s a little more, depending on the other factors, which include your credit and assets.

Once you have a pre-approval, speak to a real estate agent. A good agent will help you determine if a co-op is right for you.

Q: Is it bad to put a home on the market in the winter?

A: There are a couple of factors to take into account. First, if you do list over the winter, you have the advantage of competing with fewer properties. Also, any buyers looking over the winter are usually more serious.

Some people think that the market is more active in the springtime. This is true but does not necessarily mean you will get a much better price. There is no way to predict the spring market and if there will be an increase in prices.

If there is a lot of inventory and buyers are not abundant, you might actually get less.

If you are looking to purchase in the spring, you might be in a better position if your home is already sold; therefore, a seller doesn’t have to either wait for a sale or agree to a “contingent” offer (meaning they don’t have to wait for you to find a buyer).

Send your real estate-related questions to jambron@halstead.com.
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