Categories: Rev. Dr. Charles Butler,
If you don’t buy in Harlem soon, there will be nothing left. You must stop wasting your money and start preparing for homeownership right now! The truth of the matter is Harlem is being purchased right before our eyes. While members of our community are wasting money, others are buying property. You must have homeownership to achieve homeownership. Stop waiting for a government handout, that’s not happening. Some of us are still waiting for the 40 acres and a mule! You remember that promise, right?
Here are some tips to help you prepare for homeownership: (1) Do not borrow more than you can comfortably afford to pay. You want a monthly mortgage payment that you can manage even when facing financial hardship. (2) Shop around before deciding on a mortgage product. Not every lender offers the same products, and rates will vary. Comparison shopping can assist you in finding the best deal. (3) Use your resources. Work closely with your housing counselor. He/she knows the various mortgage products and can assist you in finding the most suitable program for your financial situation.
Most lenders are calculating pre-approval amounts based on 3- 4 times your annual income depending on minimum monthly credit debt. However, lenders will increase this amount if you are planning to purchase a multi-family home. They will add about 70% of the projected rental income into your monthly gross amount.
Lenders will only consider your total housing cost. These costs are the mortgage principal, interest, taxes, and insurance. The housing costs will also include monthly maintenance fees if you are purchasing a cooperative unit and monthly homeowner association fees or common charges if you are purchasing a condominium. Your minimum monthly credit debt will also be calculated in your debt-to-income ratio (DTI).
You will need to review your monthly budget to estimate the amount of money you can comfortably afford to spend on a mortgage payment. After reviewing your monthly budget, you should have a realistic idea of the mortgage amount you can handle. Also, if you are planning on a down payment amount that is less than 20% of the purchase price you may have to pay Private Mortgage Insurance (PMI). This insurance remains part of the mortgage payment until you have paid off 20% of the principal balance.
However, some lenders have a first-time mortgage product that will waive the PMI if you have a certificate of completion from a HUD approved housing counseling agency. Harlem Congregations for Community Improvement, Inc. (HCCI) is approved. All our housing counselors are HUD certified and are trained to assist you through the home buying process. HCCI offers a 4-part virtual seminar series on Thursday evening from 7:00 – 9:30 p.m. You can register on our website – hcci.org.
If you are interested in attending the workshop or have questions regarding the home buying process, contact Rev. Dr. Charles Butler at (212) 281 4887 ext. 231 or email at cbutler@hcci.org.
