If you’re a homebuyer in New York, you may have been put off by high prices and low inventory. The median sales price of a home in New York was $575,100 in June, well above the national average, according to Redfin, and one of New York’s metro areas is listed in the top 10 most expensive housing markets in the U.S. But New Yorkers can clear these homeownership hurdles by finding a good mortgage rate, choosing the right loan, and potentially receiving down payment assistance.
What Are Today’s Mortgage Rates in New York?
For Sunday, August 14, 2022, here are the current mortgage rates in New York. The average 30-year fixed mortgage rate is 5.280%. The average 30-year fixed mortgage refinance rate is 5.350%. Today, the average 15-year fixed mortgage rate is 4.700%.
Looking at variable rate loans, the average 5/1 adjustable-rate mortgage (ARM) rate is 3.500%.
This information is from Bankrate’s latest survey of the nation’s largest mortgage lenders.
Lenders have different ways of setting interest rates, so it’s important to shop around and compare offers from at least three financial institutions. Interest rates can vary by 0.5% or more between two similarly qualified borrowers, according to research from the Consumer Financial Protection Bureau. That difference could save you thousands of dollars over the life of the loan.
Current Mortgage Rates in New York
How Much of a Mortgage Do You Need to Buy a Home in New York?
Home values vary widely across the state, with much higher average prices around New York City compared to those in the rest of New York. The purchase price of your home influences your down payment, which is the cash you pay upfront toward the mortgage. The minimum amount required depends mostly on limits set by the lender and the type of loan you get. You’ll need at least 3% down for conventional loans, while FHA loans require a minimum of 3.5% or 10%, depending on your credit score. If you qualify for a VA loan, you may not need a down payment at all.
Homebuyers will also need to budget for a mortgage recording tax, which ranges from around 1% to 2% of the mortgage amount, depending on where you’re buying the home. The state charges a base tax and several cities and counties add their own tax, too. “This makes homeownership a little bit more challenging,” says Janine Ranski, northeast divisional territory executive at PNC Bank.
The table below shows how much a down payment might cost in different New York metro areas.
|Metro Area||Median Home Price||3.5%||10%||20%|
|New York – Jersey City – White Plains||$553,400||$19,369||$55,340||$110,680|
|Buffalo – Cheektowaga – Niagara Falls||$202,300||$7,080.50||$20,230||$40,460|
|Albany – Schenectady||$251,200||$8,792||$25,120||$50,240|
Best Mortgage Lenders in New York
See NextAdvisor’s reviews of the top mortgage lenders in New York:
- Guaranteed Rate
- Navy Federal Credit Union
- Rocket Mortgage
- Veterans United Home Loans
- North American Savings Bank
- Truist Bank
- Sebonic Financial
Types of Home Loans Available in New York
The major mortgage programs in New York include FHA loans, VA loans, and conventional loans. Each program has its own credit score, down payment, and debt-to-income ratio requirements. Here’s what to know about the major loan programs in New York.
Conventional loans are mortgages that aren’t backed by a government agency. Virtually every bank, credit union, and online lender offers these, so they’re easy to find and compare across lenders. Requirements are stricter with these loans, so homebuyers will need a down payment of at least 3%, a credit score of at least 620, and a maximum debt-to-income ratio of 45% in most cases. You’ll also need to budget for private mortgage insurance if you put down less than 20%, but you can eventually drop PMI.
Homebuyers who don’t qualify for a conventional loan may be able to get a mortgage backed by the Federal Housing Administration (FHA). With FHA loans, buyers need a credit score of 580 and down payment of at least 3.5%, or a credit score of 500 and minimum down payment of 10%. The buyer’s DTI ratio can be up to 50%. These loans come with both upfront and monthly mortgage insurance, which can make them more expensive than conventional loans over time.
With more than 776,000 veterans across New York, VA loans are popular statewide. These mortgages are insured by the U.S. Department of Veterans Affairs and available to service members, veterans, and surviving spouses. The major draw to this program is the ability to avoid a down payment or mortgage insurance, although borrowers must meet the lender’s specific credit score and DTI limits and pay an upfront funding fee.
First Time Home Buyer Programs in New York
When it comes to buying a home in the Empire State, “affordability is an issue, certainly for first-time homebuyers, who often aren’t aware of how much is out there,” Ranski says. “There’s a tremendous amount of programs available in New York, and the majority of banks accept them.”
First-time homebuyer programs provide cash to cover the upfront costs of buying a home, such as the down payment and closing costs. If you meet the program’s qualifications, you may be eligible for grants that don’t have to be repaid or loans that act as deferred second mortgages.
New York offers several local programs and may even allow for buyers who aren’t entirely new to homeownership. Each program has different requirements, such as income or asset limits, location restrictions, or credit score guidelines. Here are some of the programs available at the local level:
- HomeFirst Down Payment Assistance Program: Qualified homebuyers can receive up to $100,000 toward a down payment or closing costs on a condo, one- to four-unit home, or a cooperative in one of the five boroughs of New York City. The loan is forgivable after the buyer lives in the home for either 10 or 15 years, depending on how much they borrowed.
- Belmont Shelter Corp.: This agency offers counseling and financial assistance to homebuyers in western New York. For instance, Buffalo homebuyers may receive up to $5,000 toward down payments and closing costs, and Hamburg buyers can receive a forgivable loan up to $10,000 toward principal reduction.
- Community Development Corporation of Long Island: The CDCLI offers grants that can be used toward down payments and post-closing home repairs, plus loans that act as deferred second mortgages. Applicants may need to meet income requirements and follow purchase price limits.
- UNHS NeighborWorks: This agency offers counseling and financial assistance to homebuyers and homeowners in the Hudson Valley area. For instance, Oneida County and Southern Madison County buyers may qualify for a grant of up to $31,500 that can be used for the down payment and rehabilitation costs.
- Ask your lender: Many banks have their own internal assistance programs, Ranski says, so ask about these when shopping around. Consumers may be able to layer lender assistance programs with ones offered by state and local governments.
What Is the State of New York Mortgage Agency (SONYMA)?
The State of New York Mortgage Agency (SONYMA) is a public authority that offers low-interest mortgage loans and homeownership assistance programs statewide. To get a SONYMA home loan, you’ll need to find a participating lender and go through the application process. Here are two programs SONYMA offers:
- SONYMA Achieving the Dream: This program offers 30-year fixed-rate mortgages with a 3% down payment. Buyers must contribute at least 1% out of pocket and may cover the rest with down payment assistance. Applicants will need to show good credit and the ability to repay the mortgage.
- SONYMA Low Interest Rate: This program offers 30-year mortgages with lower down payment requirements and low interest rates.
How to Refinance Your Mortgage in New York
Refinancing involves taking out a new home loan, paying off the old mortgage, and starting a new payment schedule. Many homeowners do this when they qualify for a lower interest rate or they want to borrow cash, remove private mortgage insurance, or take someone off the home loan.
The process for refinancing in New York is similar as in other states, with one notable exception. Borrowers may be able to lower the mortgage recording tax by getting a refinance loan with a Consolidation, Extension and Modification Agreement, or CEMA. The CEMA allows borrowers to pay mortgage recording taxes on only the difference between the current principal balance and the new loan amount.
To take advantage of this option, you’ll need to find a mortgage lender that offers CEMA refinance loans. The financial institution will work with your current lender to collect the necessary documents and lead you through the process, Ranski says. You may need to pay special fees for the CEMA, which should be disclosed in your closing costs.
In addition to checking whether the lender offers CEMA loans, ask for an interest rate and closing cost estimate. Closing costs typically equal 3% to 6% of the loan balance, so you’ll need to consider whether you’ll stay in the home long enough for any monthly savings to outweigh the upfront costs.