From Manhattan’s glittering skyscrapers to upstate’s rolling country hills, New York offers diverse real estate options to match any house hunter’s wish list. A bite of the Big Apple doesn’t come cheap, though, with the 2009 median home price coming in at $253,800 according to the National Association of Realtors. Despite being significantly higher than the 2009 national median of $172,100, regional prices vary greatly, with values trending higher in the state’s southern metropolitan areas.
Where to Buy Homes
Covering nearly 55,000 square miles of the Northeast Corridor, New York’s housing options include everything from urban condos, co-ops, and townhouses to suburban and rural single family homes in boundless styles of Colonials, Cape Cods, and the wildly popular Ranch, among others.
Urban Lifestyle in New York’s Backyard
For commuters who enjoy the quick pace of the city but prefer to have their own space, New York City’s suburbs in Westchester County and Long Island are unquestionably the best bet. These neighborhoods offer easy access to public transportation, some of the best schools in the country, and perhaps most importantly, plentiful employment opportunities in nearby New York City. These desirable locations are some of the priciest in the state, with median values for Westchester and Long Island coming in at $437,200, and $381,400, respectively.
In Westchester, the “river towns” along the Hudson, as they are known locally, are great areas to explore, each featuring its own Main Street with theaters, restaurants, and shops. Local residents take pride in these small towns, including Dobbs Ferry and Tarrytown, and maintain a family friendly environment with close-knit relationships. Long Island’s “Five Towns” area in southern Nassau Country lies just outside of New York City, and provides the convenience that commuters expect, with the small town feel of a suburban oasis with beachfront views to boot.
Enjoy the Gateway to the Northeast in New York’s Capital District
New York’s Capital District, which includes the Albany/Schenectady/Troy metropolitan areas, is another great location for house hunters to consider. Just south of the Adirondack foothills, this area combines nature with the convenience of the several small cities nearby. With its plentiful jobs in state government and education, the area has seen slow and steady growth over the last decade, and boasts a median home price of $189,100, which is slightly above the national average. Capital District home buyers should consider the nearby towns of Clifton Park, Colonie, and Guilderland, which all offer reasonable prices, nearby commercial areas, and moderate growth.
Scenic Panoramas Meet History and Architecture in Western New York
For what it lacks in population density, western New York makes up in breathtaking scenery and outdoor activities. The metropolitan areas of Syracuse, Rochester and Buffalo also all offer lower costs of living, although jobs are not as plentiful as the downstate and eastern areas. Featuring respective median prices of $121,000, $116,400, and $113,600, these are cities worth exploring for their history, culture, and natural splendor. Although the population is in slight decline, real estate lovers will fall for Rochester’s historic buildings and architecture, and nature enthusiasts should be sure to investigate nearby Canandaigua, which has experienced a surge in single family building permits in the last ten years.
Always Be Prepared: Delinquency and Foreclosure Law in New York State
If a borrower becomes delinquent on his or her loan in New York State, the foreclosure process will begin after approximately two to three months. If the loan is a sup-prime or non-traditional loan, the borrower will receive a 90-day pre-foreclosure notice as required by state law. In the case of a traditional loan, the entire balance will become due, and the lender will send an acceleration letter and file a lis pendens, or pending lawsuit. The borrower will also be served with a summons at this time. If the loan is sub-prime or non-traditional, state law requires a mandatory settlement conference within 60 days. For a borrower with a traditional mortgage, the process will at this time move to the court system with either a Motion for Order of Reference if the borrower answers the summons, of a Motion for Summary Judgment if the summons is not answered. At the end of the process, if no settlement is reached, the Motion for Judgment of Foreclosure and Sale will be filed with the court by the lender. Finally, the property may either become Real Estate Owned, or property of the lender, or may be sold at auction.
When obtaining a mortgage to buy a home in New York State, its important to be familiar with the prevailing laws and regulations. This is especially important in New York because it is a recourse state. This means that if a borrower defaults on a home loan, the lender may sue, seize assets, or garnish wages to recoup any excess loan balance after the house is foreclosed on or sold at auction or short sale.
Mortgage Types: Traditional Loans vs. Housing Assistance Programs
In addition to traditional fixed and variable rate mortgages that are available nationwide, New York State has several programs designed to aid first time or low income buyers. The State of New York Mortgage Agency (SONYMA) offers five mortgage programs, which are made available to residents through the sale of tax exempt bonds.
- The Homes for Veterans Program features mortgages with low interest rates, down payment assistance, no points or origination fees, and a 1% minimum borrower cash contribution. This program, which is geared toward military veterans, also does not require the borrower to be a first time buyer.
- The Remodel New York program also provides low mortgage interest rates, and features the financing of both purchase and home renovation through one loan. This program offers many of the same benefits as Homes for Veterans, as well as no prepayment penalties, up to 97% financing, a 100 day rate lock from the loan application date, and terms of up to 30 and 40 years. To be eligible for this program, borrowers must be first time home buyers.
- Achieving the Dream features some of the lowest rates of all SONYMA programs, available to purchasers of one and two family homes. The rate is fixed, and the program is primarily geared toward first-time, low-income applicants who may not otherwise be eligible to purchase a home.
- The Construction Incentive Program focuses on jump starting the construction of one and two family homes within the state, and features up to 97% financing. Unlike SONYMA’s other mortgage assistance programs, financing for the Construction Incentive Program must be obtained through a participating lender, of which there are over fifty within the state.
- Finally, the Low Interest Rate program is SONYMA’s standard program for first time home buyers who meet income and purchase price restrictions, which also apply to all other mortgage assistance programs as well. Eligibility extends from one to four family housing, and offers all of the features of other programs such as low down payments and no points or origination fees. The unique feature that is offered by this assistance plan is that it offers Payment Protection in the event of accident or temporary job loss.
New York State Mortgage Rates
Because New York State has such a unique variety of loan programs, housing types, and price ranges, mortgage interest rates are equally varying. Because the median price is generally above average, rates may be higher to due the size of the loans, but this is dependent on down payment amount and credit score. If eligible for one of the State of New York Mortgage Agency assistance programs, rates can be substantially lower, but the home price must not exceed the purchase limits, as indexed by region.
New York State Programs Can Ease the Cost of Mortgage Interest
To lessen the burden of mortgage interest, SONYMA also offers a New York State Mortgage Credit Certificate program for first time home buyers who do not receive other assistance from the agency. Under this program, 20% of annual mortgage interest can be deducted from federal income tax liability, with 80% remaining an itemized tax deduction.
Taxes, Refinancing, and Additional Information
When shopping for a home in the state, its also important to note that New York State requires both a mortgage recording tax and a realty transfer tax. Within the five boroughs of New York City, purchasers are subject to these taxes not only on the state level, but on a city level as well. Although this will not affect the monthly mortgage payment or interest rates, it can add a significant cost to the amount due at closing.
New York State also requires the mortgage recording tax when refinancing a mortgage. Under a “consolidation, modification, and extension” agreement, however, the mortgage recording tax only applies to the closing costs. The process can be time consuming, and almost always requires a real estate lawyer to properly execute. If improperly done, a mortgage refinance in New York State can result in recording tax being owed on the entire mortgage amount.
While shopping for a home or a mortgage in New York State can be costly, the end certainly justifies the means. Buying a home in the Empire State offers the best of both worlds, with glamorous urban living at your front door, and breathtaking natural vistas in New York’s backyard. Be sure to take advantage of the state programs help to reduce both the up front and long term costs of the mortgage, and enjoy all that New York has to offer.