How much does it cost to buy a home in Buffalo NY?
How much does it actually cost to buy a house in Buffalo NY, especially after these post covid times when inflation has gone through the roof! Things are simply just much more expensive these days, But there is a bright light at the end of the tunnel! The Reason being, Buffalo NY real estate is still extremely affordable compared to the national average or major cities like NYC, Philly, Atlanta or Houston. No matter if you are relocating to buffalo ny or live in buffalo already and looking to purchase a home, this article is everything you need to know so you can purchase a home here!
So what do you actually need in order to buy a home in Buffalo? Let’s Start off by saying as of August 2022 the Median home price across the entire Buffalo NY and Niagara Region is $241,500. That is $193,550 less than the national average at $435,050.
If you are someone moving here from California, Texas, Atlanta, or another major city, you can sell your home, purchase here and potentially live mortgage free. Just watch out for our taxes lol as we will talk about a little later on. Buffalo’s affordability grants people opportunity for ownership and can really change an entire families life.
Downpayment
How much money do I need to buy a home in Buffalo NY? Everyone is always focused on the mystery number of the downpayment, but it Is not as bad as one may think. You DO NOT need 20% down, that is a myth. The average person puts down between 7-10%. On a $200,000 home, that is $14,000 to $20,000, thats it. If you want to put more down then perfect, it will most definitely help with a lower monthly bill, but it is not mandatory.
Here are the 3 main types of loans
FHA loan is 3.5% down
Conventional loan is 5% down
VA loan is up to 0% down
Lately banks have been giving even lower rates, if your credit score is around 720-750 right now they're giving out conventional loans for only 3%. I just had 2 clients get approved for this same loan. If you need me to connect you with a few local banks, I am well connected with some of the top lenders and we can get that set up ASAP. Just shoot me an email support@devontedavis.com
Preapproval
You have to get Pre-approved by a lender, this is a huge step in buying a home. There are two key things thats lenders need in order to approve you. That is a good credit score and a low debt to income (DTL). Always remember this, HIGH CREDIT AND LOW DTI.
DTI = Your expenses / Your gross income.
Lets say you gross (Before taxes) $3,000 per month and your expenses are $1,000 a month
DTI = $1,000/ $3,000 will give you a DTI of 33%
The highest you can go for a conventional loan is 35%, FHA is 45%
Especially those of you relocating from out of state to Buffalo NY, you must be employed in the Buffalo area and that is crucial. Unless you are 100% remote, your new job must be in buffalo. When going state to state for a job/location transfer, this usually takes a little longer than most people think so plan accordingly. Speak with you job about your arrival date and exactly when that will be, that way once we sit down on a call we can reverse engineer everything so that we time things up as best as possible! I have had other clients transfer and then rent for a few months just to get settled in and then proceed to look for a new home. This really depends on your comfort level.
So that's something you guys wanna know. Is your job remote or not remote? If not we need a letter from your employer. That's the biggest thing, especially when it comes to the pre-approval.
The Plan
Lastly, do you have a house to sell? A lot of people moving up to buffalo own a home already, so we need to time it correctly so that you are not in a short term rental longer than needed.
Here are 3 questions I find that really helps my clients as we devise our plan of action:
Are you going rent the house out that you already have and use it as income?
Are you going to buy here first and then sell your house back at home?
Do you need to sell your current home and use those proceeds to purchase a home here?.
So, let's run through all of those real quick.
If you're going to rent out your house, back at home, you're now becoming a landlord, congrats! Know if you will hire a property manager or manage your self (its all about the Numbers). Secondly, you want to make sure you have a 12 month lease signed and ready to go, once we sit down with the bank you can submit that within the income section of the application. You can explain we receive $3,000 a month from the house back at home. Our mortgage is only 1500, so we're netting 1500 every single month .
If you you need to sell first, Call me ahead of time so we can see what the time table looks like for you. Remember it takes 2 months to close here if you are getting a home loan, about 45 days if you are paying cash. So we must plan ahead! We want to try to make this process as seamless as possible, or if you guys do need to sell and then buy up here right away, we can, like I said, still start from the back end.
Now, I would always recommend, if you can, buy first and then sell. A lot of people want to use their proceeds and I definitely get it, especially when it comes to a mortgage. But if you guys can buy first, this allows you guys to lock in something here and not worry about having a place to live. Once you home sells from your previous state, you can then do with the proceeds as you wish!
This should give you a great start and feel for how to purchase a home in buffalo NY. Lets jump on a call the moment you start thinking about purchasing that way you have someone to lean on and guide you through this entire process.