When you shouldn’t buy your dreamhouse
By: Daniel Gershburg, Esq.
Looking to purchase your first home in new york city? Are you looking for a mortgage in Brooklyn? Lets face it. Everyone gets caught up in the moment when they are looking to purchase their first home in New York. The idea of ownership, culminating from several years of saving up funds for a downpayment (and closing costs), allows one to make rash decisions that they ordinarily wouldn’t make. But this last week taught me a very important lesson. The lesson is that sometimes it is better to pass up on purchasing a home when your gut tells you to. It’s important to make the smart, objective decisions that won’t require you to call a lawyer for bankruptcy help because the mortgage may just be too large or the house worth much less than you initially thought.
One of my clients taught me this lesson this past week. A first home buyer with perfect credit, he seemed the ideal candidate to purchase a condo in downtown Brooklyn. However, as things progressed, he realized something wasn’t right. Issues with banks and mortgage brokers led him to believe that this just wasn’t the right place and time to purchase…and he walked. He made the right decision for himself.
Another client of mine found that a house he thought was perfect, ended up having too many structural issues to handle. The glimmer in one’s eye when they think they have found the perfect home tends to fade when they see how much it will cost to actually “make it perfect”. And so, he too decided to pass.
The lesson here is this. When you think you’re ready to pull the trigger on purchasing a home…take a long breath and a step back and ask yourself if you’re ready for the commitment. Are you ready to purchase this house, for this price, right now? If you’re not, thats absolutely ok. FYI, I am a New York real estate attorney who is telling potential clients that its ok to walk away and not purchase a home. I think…I know…in the end its better to have piece of mind surrounding the house you buy.
A last lesson which one should keep in mind at this time. The banks have become MUCH more stringent about who is qualifying for mortgages and who is not. You hear stories about sub-prime mortgages all the time, but you dont hear whats happening which prime mortgages, specifically alt+A mortgages. These mortgages are given to people with good credit and very little income and asset documenation. As a result, many people with credit scores of 720 and above are failing to procure mortgages they need. Banks such as Countrywide and Bank of America, who used to give out mortgages like they were promotional pens are cutting the pursue strings rather tight. Just a word of caution.
Daniel Gershburg Esq., is a Bankruptcy & Real Estate attorney serving clients in Brooklyn, Queens, Manhattan, Staten Island, Long Island and Westchester. Mr. Gershburg has given lectures and presentations to both attorneys and the community at large surrounding Bankruptcy and financial advocacy in the New York City area. He is a proud member of the National Association of Consumer Advocates. Currently he is working on his first book giving practical advice about repairing troubled credit and how to improve credit post Bankruptcy