Buying a new home in New York City is something many people want to do. However, not everyone can afford a mortgage in the city … and those who can sometimes aren’t entirely positive exactly how large a mortgage they can fit into their current budget.
You can use technology to help you determine precisely how much of a mortgage you can afford. This should help you find your dream apartment or townhouse in virtually any New York City neighborhood, whether you’re hoping to move into Hell’s Kitchen or the Upper East Side.
Download a budget app
The first way to determine how much you can afford to spend on a mortgage is to download a budget app into your smartphone or tablet. The app should enable you to input what you bring home each month and your total monthly expenses, which will allow you to see your financial position in a solid form.
These apps are helpful because you can account for every dime you earn and spend. Trying to make up your own budget may leave you liable to forget specific expenses such as child care or even groceries.
Look up local property taxes
One thing homeowners often forget to account for is the extra you’ll have to spend on top of your mortgage. This includes insurance and property taxes, building maintenance costs, and homeowner association fees. You can use the Internet to establish an approximate amount for each.
You’ll need to know specifics. For example, property taxes in Hell’s Kitchen are obviously going to differ from the rates for a Park Avenue apartment. You can look up property tax rates online, which will help you to budget for this expense as part of determining your mortgage amount.
Apply for a mortgage
Now that you have a solid sense of what you can afford, you can apply for a mortgage. Your lender will come back with an amount, and you can add your other expenses to it in your current monthly budget app. This allows you to see what your financial state will look like based on the mortgage qualifications provided by the lender.
In this manner, you should be able to see what your budget will look like when your new mortgage is included. You’ll know whether you want to spend what the bank says you can afford, or if you want to opt for something less expensive to allow for more financial freedom.
Many homeowners make the mistake of assuming they can comfortably afford what their lender tells them they can. However, not all homeowners can actually cover what the bank assures them they can.
This is why it’s important to assess your financial options on your own before you agree to the terms and conditions of any mortgage. Fortunately, new technology makes that much easier.