Thinking about buying a home on Long Island? Here are some of the things you might want to consider before you sign…
The Home Buying Process
For first time home buyers on Long Island it is important to understand the process to make sure you timing is right and you keep your stress down as you move toward owning your own place.
- Determine your budget and what you can afford
- Get pre-approved for a loan
- Make a short list of the features you need most
- Start searching for homes
- Make your offer
- Begin the mortgage process
- Conduct inspections and appraisals
- Gather any other items you lender requires
- Schedule the closing and sign the final paperwork
- Get your keys and move in
Gauging What You Can Afford
When it comes to buying a home there is the amount a mortgage lender might approve you for, and how much you feel comfortable paying.
A lender may approve you for more than you want to pay. Or due to quirks in their underwriting process you might be limited to less.
Many Long Island home buyers may be wise to try and find something cheaper than they can afford in order to ensure an easier loan process and that they will be able to hold onto the property long term. They last thing you want is to lose it, right when you’ve built up a lot of equity.
Remember, that in addition to your principal and interest mortgage payment, you’ll also have insurance, maintenance, utilities, property taxes, and possible coop or HOA dues. While you may be able to lock in your mortgage payment, all of these other costs can go up year after year. You need to factor this in for the next 30 years.
Other considerations may be whether you can you legally lease it, or part of it later to bring in income to offset rising costs or other hits to your income.
Factoring in the Property Tax Impact on Local Business
NY and Long Island business pay some of the highest taxes in the world. The LIPA pays $82M in property taxes each year. That’s more than double what Disneyland pays, and even the Empire State Building. Around 15% of your bills go just to pay towards these property taxes, in addition to your own.
Unfortunately, the high tax environment isn’t very attractive to new or established global businesses. Due to the new digital environment we live in, companies no longer need to have a physical presence in big metros like Manhattan or New York. They don’t have to keep paying high local wages, when they can recruit from a global talent pool of remote workers.
New York will always be great. Yet, unless things change a lot, there may be fewer local businesses and local jobs in the future. You may need to plan on being able to work virtually and from home and to polish your online skills if you are going to be able to keep making those mortgage and tax payments.
The Need to Keep the Tax Man in Check
One of the jobs most don’t expect to take on when buying a home is the need to constantly stay on top of the tax man. Property tax bills on Long Island are notorious for being incorrect and over-inflated. Beat this by checking your annual property tax bills and using Property Tax Adjusters to challenge, appeal them, and keep them down, so you can keep affording that home.