Does the rapid approach of fall make you want to find a permanent home to nest in? We don’t blame you! But buying a home in NYC is not an endeavor to take lightly, especially when it comes to finances. There are many factors to consider and it’s easy to feel daunted, especially if you’re a first-time home buyer. Luckily for you, StreetEasy has your back this season (and year-round). Here are our top tips for financing a home this fall, with insights from local NYC real estate pros.

Manhattan Homes Under $1M on StreetEasy Article continues below

Lenox Hill

205 East 63rd Street

$350,000

Studio |

1

Lincoln Square

246 West End Avenue

$849,000

1 |

1

Hudson Heights

736 West 187th Street

$849,000

2 |

2

Lenox Hill

520 East 72nd Street

$450,000

1 |

1

Hell’s Kitchen

393 West 49th Street

$570,000

Studio |

1

Sutton Place

227 East 57th Street

$950,000

2 |

2

Yorkville

340 East 80th Street

$625,000

1 |

1

Washington Heights

47 Fort Washington Avenue

$799,000

3 |

2

Financial District

56 Pine Street

$600,000

1 |

1

Midtown

77 West 55th Street

$525,000

Studio |

1

Greenwich Village

24 5th Avenue

$550,000

Studio |

1

Beekman

400 East 52nd Street

$575,000

1 |

1

Determine your true budget (not just maximum price)

First thing’s first: to secure your dream digs, you need to figure out your true budget. Having this number in mind helps you narrow down and streamline your search, and manage expectations around what types of homes you can truly afford.

But your budget shouldn’t be determined solely by listing prices. “Don’t just look at the purchase price,” advises Khali Smith, licensed real estate salesperson at Corcoran and StreetEasy Expert. He explains that in NYC, “most co-ops require two years of post-closing liquidity and a less than 30% debt-to-income ratio, which can really shape what you can afford.” As such, it’s important to consider the holistic reality of all your finances and assets when coming up with your target budget.

Get clarity on all costs

Assessing your liquid cash, factoring in debt, and saving for a down payment are just the beginning. As Smith puts it, “One of the biggest surprises for new buyers tends to be the fees.” He’s referring to monthly fees, closing costs, and other post-purchase expenses.

Monthly fees or “monthlies” are the payments you’ll be responsible for making every month you live in your new home. These of course include your monthly mortgage payment, but also maintenance fees for co-ops, common charges for condos, and property taxes.

It’s also important to diligently save up for closing costs, because as Smith warns, “attorney fees, title insurance, and transfer taxes add up quickly.” These fees can sometimes total up to 10% of the purchase price.

And then there are the other expenses you may overlook. Smith recommends setting aside a good chunk of change to help with “moving costs, small renovations, or simply having a cushion so you’re not stretched too thin once you’re in your new home.”

Understand co-op vs. condo financing (they’re not the same!)

Co-op or condo? In NYC, it’s an age-old question. Beyond offering different types of buildings, amenities, ownership, and approval processes, there are significant financial differences to be aware of when choosing between these two types of homes.

As Smith points out, “Co-ops usually require a bigger down payment of 20-25% or more.” Co-op maintenance fees tend to be higher than condo common charges “since they bundle in property taxes,” and co-ops charge extra fees for the application and board package.

Speaking of co-op boards, it’s important to remember how much financial scrutiny they exercise in the approval process. “Boards can be strict about post-closing liquidity,” warns Smith, making it all the more crucial to be realistic about your true budget.

When it comes to condos, potential home buyers will typically experience more financial flexibility in the form of “lower down payments, separate common charges and property taxes, and more freedom in terms of ownership.” So what’s the catch? “Condos often come with a higher purchase price compared to co-ops, and higher closing costs thanks to the mortgage recording tax,” Smith says.

Brooklyn Homes Under $1M on StreetEasy Article continues below

Canarsie

10017 Avenue L

$735,000

3 |

2

Gravesend

355 Kings Highway

$849,000

3 |

3

Fort Hamilton

20 93rd Street

$450,000

1 |

1

Gerritsen Beach

63 Seba Avenue

$750,000

6 |

3.5

Crown Heights

960 Sterling Place

$395,000

Studio |

1

Clinton Hill

321 Grand Avenue

$688,000

2 |

1

Park Slope

222 16th Street

$950,000

1 |

1

Weeksville

1526 Lincoln Place

$620,000

2 |

2

Gravesend

8322 24th Avenue

$868,000

2 |

2

Park Slope

343 4th Avenue

$785,000

1 |

1

Homecrest

2240 Burnett Street

$239,900

1 |

1

East Flatbush

2020 East 41st Street

$189,000

1 |

1

Financing contingencies and pre-approval basics

Taking all the above costs into account, you may be balking at the amount of money needed to secure your very own piece of NYC real estate. We get it! Purchasing a home is a big deal (no pun intended). Luckily, there are a few things you can do to ensure your money is safe and secure throughout the process.

For example, Smith encourages home buyers to take advantage of mortgage contingencies, which are clauses written into a real estate transaction that allows buyers to cancel the contract should their financing fall through. He explains that contingencies act as “a safety net, protecting you so you don’t lose your deposit.”

Another helpful tool to take advantage of is securing an official mortgage pre-approval. It involves some paperwork, but getting pre-approved for a specific mortgage amount “shows sellers you’re serious and gives you clarity on your budget.” It can also help expedite the buying process once your perfect home hits the market. After all, as Smith points out, “in NYC, speed can make all the difference.”

Never DIY the buy

There’s no getting around it: the financial realities of buying a home are complicated and intense, especially for first-time buyers. If you’re feeling overwhelmed, Smith has some simple advice.

“Don’t rush. Take the time to understand your finances and lean on your team for guidance,” he advises. And for seasoned buyers, don’t make the mistake of thinking yesterday’s real estate market applies to your present circumstances. As Smith reminds: “Rules and requirements evolve, and NYC is constantly changing.”

Queens Homes Under $800K on StreetEasy Article continues below

Flushing

138-32 Northern Boulevard

$797,500

1 |

1

Jackson Heights

34-41 85th Street

$299,000

Studio |

1

Oakland Gardens

69-10 Bell Boulevard

$229,000

1 |

1

Flushing

138-10 35th Avenue

$510,000

1 |

2

Little Neck

57-22 244th Street

$358,000

3 |

1

Rego Park

64-11 99th Street

$375,000

2 |

1

Rego Park

99-60 63rd Road

$295,000

1 |

1

Jamaica

110-43 159th Street

$799,000

3 |

2

Murray Hill (Queens)

35-91 161st Street

$589,000

1 |

1

Rockaway Park

133 Beach 116th Street

$575,000

Studio |

1

Jackson Heights

34-41 78th Street

$359,000

1 |

1

Cambria Heights

115-39 226th Street

$729,000

3 |

2

And there’s no shame in hiring professional help — in fact, we highly recommend it, as working with an experienced agent can significantly ease the stress associated with the home-buying process. As Smith puts it, “a good agent can break down each financial step, flag potential surprises before they happen, and connect you with trusted lenders and attorneys.” You don’t have to go it alone!

Visit our resource hub for buyers for more on how to unlock NYC with a buyer’s agent at your side. Our team of StreetEasy Experts includes plenty of buyer’s agents who are valuable sources of hyper-local knowledge, and reliable shoulders to lean on throughout the buying process. Contact the StreetEasy Concierge to be matched with an Expert agent whose experience and skill set matches your particular needs.

StreetEasy is an assumed name of Zillow, Inc. which has a real estate brokerage license in all 50 states and D.C. See real estate licenses. StreetEasy Concierge team members are real estate licensees, however they are not your agents or providing real estate brokerage services on your behalf. StreetEasy does not intend to interfere with any agency agreement you may have with a real estate professional or solicit your business if you are already under contract to purchase or sell property.