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‘Tough, but worth it.’ 5 crucial lessons I learned from buying a home in 2021’s competitive real estate market


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For years, I lived in a “flex” one-bedroom apartment that I shared with a roommate on the Upper East Side of Manhattan. I paid $1,600 for my share of the rent — and throwing away that money every month was getting to me. I wanted to invest in a home of my own, especially since I knew that rates on 30-year fixed-rate mortgages were near historic lows. (Indeed, some 15-year rates are near 2% and some 30-year rates are below 3%.)

But I could only afford to put 10% down, and when I started working with agents in 2020, I was told it was not possible to find an apartment in Manhattan with my financials (most co-ops in the areas I was looking at wanted 20% down). But I knew there had to be a way around that. So I contacted numerous agents until I found one who would help me find the few one-bedroom apartments in my price point that would accept a 10% down payment. 

In late February 2021, I found the one-bedroom co-op that checked off most of the items on my wish-list (it was even on the same street I’d been renting on for the past six years). My offer was accepted, and for $25,000 below the asking price. But then came the harder part: Six months of going back and forth with bankers, lawyers, and my agent waiting for mortgage and board approval (spoiler alert: it was tough, but worth it). Here’s what I learned about buying a home in 2021.

You may not need as large of a down payment as you might think

Home prices are rising and that can make coming up with the necessary down payment even tougher. But even if you don’t have a big down payment, there could be a variety of options for you to buy a home. In my case, my agent found co-ops that accepted just 10% down. For you, the options may be different. An FHA loan may require just 3.5% down, USDA and VA loans may not require a down payment at all, and here are more options to consider.

Work with an agent who will invest the time to find a home that matches your wants, and your budget

Get an agent who understands your financials and what you are looking for, and can make the right suggestions and give the right advice. It took me a few tries to find this, but once I did, it was well worth it. You may also need to expand your search area or refine the list of things you consider must-haves; an agent should be able to help you do this.

Get your finances organized, and your credit score up

Before you put in an offer, get your credit score and finances in order. “First-time homebuyers should try to improve their credit score as much as possible. One of the ways to do that is by checking your credit report for errors and disputing inaccuracies,” says Jill Gonzalez, an analyst at WalletHub. Here are more tips on upping your credit score.

And get your finances in check too, especially if you are a single home buyer relying on one source of income like myself. You’ll need the last two years of tax returns, W-2’s if applicable,  documentation for all your income and your credit report. Here’s a full list. Be sure to be on top of monthly payments on all your accounts and take care of any issues before getting pre-approved for a mortgage. This was crucial for me since I have student loan debt and did not have other assets outside of my solo income and 401K. 

Hire a team you can trust that’s familiar with the area and type of property you’re buying 

I learned that choosing a mortgage banker and lawyers that have familiarity with the type of home you’re buying — whether it’s a house, condo or co-op — in the city you’re buying in is also imperative. My mortgage banker and lawyers did not have experience with closing on co-ops and were both based in upstate New York, and this slowed down the process.

The week before I was scheduled to close, my bank failed to update my appraisal that had expired, delaying the closing for another two to three weeks. It was often impossible to get in touch with the same mortgage banker between their summer vacations and days long-delayed responses — another reason I wish I worked with someone I knew or who came recommended. 

Keep track of interest rates 

Interest rates dropped a few points as I was waiting on final co-op board approval and I was able to get a lower rate that shaved off a little over $100 on my monthly mortgage payment. Since rates change quickly, if you find a lower rate. you may want to lock it in. “Keeping yourself updated on the latest mortgage rate trends should help you get the lowest mortgage rate before closing. However, typically, when you’re locked into a mortgage rate you won’t be able to change it if rates go down. It’s important you understand clearly what your lender’s rate lock rules are, and find out if your locked rate could change in certain circumstances,” Gonzalez says.

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