Brooklyn Real Estate Q&A and Info

The New York City Rent Guidelines Board last night, amid the usual controversy, approved rent hikes of 3% and 6% for one- and two-year lease renewals for rent-stabilized apartments where the landlord provides heat.  For apartments where heat is not provided, the increase will be 2.5% and 5% for one-year and two-year lease renewals.  The increase affects lease renewals that go into effect after October 1, 2009.

Considering the fact that there are many people unemployed or underemployed, a rent hike for those who can least afford it seems like a hard pill to swallow, however not all landlords are wealthy, and rising expenses makes the increase something that many multi-family property owners need to stay out of bankruptcy and/or foreclosure.

Its a tough situation all the way around for renters and owners a like.

Besides determining whether or not you want to own a house and can you afford mortgage payments, ”do I have enough for a down payment?” is the next most important question any first time home buyer should ask him or herself.

What’s the Down Payment For?

The theory is that when a borrower puts a significant amount of their own money into the purchase of a house, they are less likely to “walk away” from their obligation to repay the mortgage because they don’t want to lose their own money.

An example of that would be, a person buys a $500,000 piece of property.  If they put 10% or $50,000 of their own money towards the purchase, when things get tough, they are less likely to let the loan default.  Why?  Because not only will they loose their place of residence, they will also loose their $50,000 dollars, and that kind of money’s not easy to come by for most of us. 

The recent crash in the housing market where 0% financing was running rampant has proven the above theory to be a sound one.  I was told by a fellow realtor of a client who had purchased a home with 0% financing who walked into the bank he borrowed the money from, put the keys to the house on the loan officers desk and said, “Here you can have your house back.”   He was having a hard time making the payments and decided to simply walk away from the house.  True, his credit would be trashed, but since he put no money into the house, he didn’t loose any.  0% financing is a thing of the past, for now.

How Much Down Payment Money Do I Need?

Today in 2009, with the exception of an FHA loan where you can put 3.5% down on a piece of real estate, most lending institutions require that you have at least 10% of the purchase price to put down when you want to buy a house, condo or co-op.  In some circumstances a lender might require even more.

So, if you want to purchase a co-op in Brooklyn for $200,000 and 10% down is required, you will need at least $20,000 for the down payment. (FHA loans are not available for co-ops)

If you want to buy a house for $400,000 and you qualify for an FHA loan, you will need at least $14,000 or 3.5% of $400,000 for a down payment.

So, before you start searching craigslist.com or going to open houses, or you make that call to your local realtor, you have to have enough money for a down payment before you can purchase that dream home.

If you would like more information about down payments or house buying in general, feel free to give me a call.

If you’re a first time home buyer who has been waiting to make that first purchase, don’t wait any longer or you might miss the low interest rate boat.

Mortgage rates rose for the third time in three weeks.  In the last three weeks the average rate for a 30 year fixed rate loan made a leap from 4.62% to 5.67%.   Ok, that doesn’t really seem like much.  Lets do the math….

If you’re borrowing $200,000 at 4.62% for 30 years, your monthly payment will be $1027.68 a month.  At 5.67% it will be $1157.00, that’s about $130 dollars in additional money you’ll owe the bank each month.   Over the life of your loan you’ll be paying the bank $46,800 more then you have too.  I don’t know about you, but I can find a lot of things to do with that kind of money besides giving it to the bank (how about a trip to Hawaii).

Don’t keep waiting.  If you’ve got the financial situation you need (decent credit, down payment money and a stable job with good income) go ahead a buy your first house, condo or coop!  If you’re not sure if you have the financial situation you need, give me a call at the number below or click here to send me an email. 

Don’t hesitate any longer, let me help make finding your first home as easy and as stress free as possible, and I’ll do it with a smile.

If you’re a landlord, or you’re thinking about becoming one, one of the most important tools in your land lording tool kit is the lease you have all tenants sign. A good lease can save you a lot of money, a lot of time and a whole lot of aggravation.

Here are ten items that should be included in a rental lease:

1. Your name (the landlord) and the name of the tenant and anyone else that will occupy the rental property.
2. The address and a description of the rental property subject to the lease.
3. The amount of rent the tenant must pay, when that rent is due, if there is a late fee if the rent is not paid on time and how much will it be.
4. Information about the security deposit such as how much, whether it will be collecting interest, and under what circumstances will it not be returned at the end of the lease.
5. The respective duties of the landlord and tenant regarding the maintenance of the rental property.
6. What will happen in the event that the tenant disturbs other tenants’ “right of quiet enjoyment”.
7. Under what conditions can you, the landlord,  enter the rental unit.
8. Are pets allowed, and if so, what kind, how many and are there size restrictions.
9. What happens if  the landlord dies or decides to sell the building during the lease term.
10. Whether the tenant must pay the attorney fees and costs incurred in a lawsuit that the tenant loses, and whether the landlord will pay the tenant’s attorney fees and costs in the event the landlord loses a lawsuit.

This is just a sample of what can be included in a rental lease.  One of my favorite websites on the web that has fantastic information for landlords is mrlandlord.com.  Its a website by experienced landlords for landlords.  One of the many great features you’ll find on the site is a sample lease.

Of course to make sure that whatever lease you decide to use contains everything you can legally include that is of benefit to you, consult with an attorney.

Happy Landlording…..