There are many questions you need to ask yourself before you enter the NYC real estate market as a buyer. One of the most significant is – How much do I need to save for an apartment in NYC?
The Savings You Need To Buy An Apartment in NYC
You need to save money for a number of things before you buy an apartment. But the most significant one is the down payment. For most standard loans, you need to save at least 20% of the purchase amount as a down payment. So, if you want to buy a $500,000 apartment in New York, you need at least $100,000 in savings to cover the down payment.
In some cases, you may be able to buy an apartment with a down payment as low as 3.5%. On the flip side, some co-op boards may require you to put even more than 20% down. So you may need to save more.
You will also need to save money for certain closing costs, basically everything that’s not rolled into your mortgage. This may include title insurance, an appraiser’s fee, the application fee for the building you are buying in, and a move-in fee (if the building you are buying the apartment in has one). In addition, you will also have to save money for the move and fixing the apartment (if you are buying as-is).
In some cases, you may need to have money to put in an escrow if you are buying in a co-op and the board is not comfortable with your financial situation.
Final Words
Apart from the down payment, you need to save somewhere between 2% to 6% of the purchase price, before you buy an apartment in NYC. Your New York City broker may be able to guide you on the exact sum and may lower this amount by passing on some costs to the sellers (if it’s a buyer’s market). However, typically, saving about 25% of the purchase price is safe.
Also Read: A Homebuyer’s Guide To Deposit, Earnest Money, And Down Payment
