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Home Mortgage Rates in New York

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New York: Learning the Layout

New York state encompasses an area of 54,555 square miles (141,299 kilometers) with a population numbering around 20,000,000 in 2009. Albany is the capitol, with a population of about 94,000 in 2006. New York City is the most populated, famous and important city measuring an area of about 368 square miles (953 square kilometers) with a population in the range of around 8,000,000 for 2009.

Lake Champlain, the Hudson River and Atlantic Ocean form the Eastern border of New York state with the Western border lined by Lake Erie, Lake Ontario and the Saint Lawrence River. The Adirondack and Catskill Mountains run through the East-Central area of the state.

New York Real Estate Prices Compared to Median United States Prices

Due to its location on the Eastern United States coastline, New York was settled before most of the rest of the country. Thus, average New York mortgage rates are priced higher than the average mortgage for the rest of the United States. New York includes some of the wealthiest communiites in the world; Manhattan property is a bellwether for real estate prices around the world.

New York state real estate prices will vary dramatically around the state. The general trends for the last two decades in New York are as follows -

  • From 1992 to 1998: generally flat
  • From 1999 to 2003: gradually increasing to peak
  • From 2003 to 2006: generally flat
  • From 2006 to present: starting to fall dramatically

Specific price comparisons between New York and the United States for 2007 to 2009 are as follows according to "InvestmentTools.com":

  • For March 2007, the median US real estate price was about $262,600
  • For March 2008, the median US real estate price was about $229,300
  • For March 2009, the median US real estate price was about $205,100

The following lists New York City average house prices from 2007 to 2009 according to Zillow.com:

  • For 2007, the average New York City house price was $450,000
  • For 2008, the average New York City house price was $430,000
  • For 2009, the average New York City house price was $380,000

According to these Zillow.com charts, New York City average house prices were about $190,000 more than the United States median house price. For this same period, 2007 to 2009, average New York state house prices ranged from about $260,000 to $300,000.

Most Popular and Fastest Growing New York Cities

The New York City Long Island metropolitan area is referred to as Downstate New York, with the rest of the state comprising Upstate New York. Manhattan is just to the west of Long Island and includes some of the most expensive real estate in the world.

Manhattan.

Due to its large size, New York City includes many neighborhoods, called boroughs, that have developed their own unique characteristics and have mortgages amongst the highest in the world: including Battery Park, Bedford, Belle Harbor, Carnegie Hill, Central Park, Chelsea, Forest Hill Gardens, Greenwich Village, Little Italy, Manhattan Beach, Queens, SoHo and Sutton Place. Sometimes, New York real estate agents might refer to the county the property is located in (i.e. Nassau or Westchester).

Other popular New York cities include Buffalo, Rochester and White Plains. Buffalo is on Lake Erie in the West; it had a 2006 population of about 276,000. Rochester is on Lake Ontario in the north-central section of the state. It had a 2006 population of about 211,000.

Some consider White Plains a suburb of New York City, since it is only about thirty miles northeast of Manhattan. White Plains had a 2006 population of about 57,000, experiencing a 7.5% increase from 2000. BusinessWeek considers White Plains to be the fastest growing city in New York state for 2010.

Typical New York Mortgages Available

The primary mortgage loans offered in New York are the 15-year fixed rate, 30-year fixed rate and 5/1 adjustable-rate mortgage (ARM). Mortgage loans can be used for purchasing a home, getting a home equity loan (for remodelling) and refinancing a home. In New York, fixed rate second mortgages are called home equity loans; the rates are usually higher than first mortgage rates.

There are many different organizations that assist with mortgage loans, including federal programs like FHA, USDA and VA loans. It is possible that potential buyers might qualify for both the state and federal loan programs. The State of New York Mortgage Agency (SONYMA) offers six mortgage programs, all of which have the following features:

  1. Competitive interest rate
  2. Low down payment requirements
  3. No pre-payment penalties
  4. Down payment assistance

The State of New York Affordable Housing Corporation assists low- and moderate- income potential homeowners with mortgages.

New York is a "Lien Theory" State

While other forms of debt agreements were contingent upon the flow of goods, services or cash streams that could pay for the accruing interest, the mortgage was a real estate contract based on an unconditional promise by the lender to repay the property loan. In return for this absolute debt repayment promise, the prrevious property owner relinquished many rights to the property, contingent on the continued repayment of the mortgage contract. Homeowners could remodel, refurbish and refurnish the property while making mortgage payments.

New York is a "lien theory" state where the property is the security for the loan. The "mortgage" is the contract document that places the lien on the property. As long as the homeowner continues to make payments, the lender cannot foreclose. If the homeowner fails to make payments, then the lender has the legal right to foreclose the property, which means that it will be resold to repay the original mortgage debt.

New York Foreclosure Process

New York is primarily a judicial foreclosure state, where the creditor issues a "Filing Complaint" to begin the foreclosure process with the Supreme Court of the county in which the property is located. The "lis pendens" is a legal document giving public notice that the said property is being foreclosed upon. It can take nearly 445 days to process these legal foreclosure documents. A court must authorize the foreclosure by examining the facts, listening to testimony and issuing a final order specifying the property and all conditions and terms of the foreclosure sale. This court ruling might take from seven to nine months to occur. Once the court ruling is issued, a sale is set for four months thereafter.

One Action to Recover Mortgage Losses

In New York, a lender can initiate only "One Legal Action" to recover the amount due on a mortgage - either 1.) foreclosure, or 2.) suing to collect the debt. If upon resale of the property, the full original loan amount is not recouped, then the "deficiency judgment" is another remedy open to the creditor if there is an "express promise" to fully repay the full loan amount included in the mortgage document. Then, the creditor can file a "Motion for a Deficiency Judgment" within 90 days of the foreclosure sale to attempt to regain the outstanding mortgage value from the debtor.

The "right of redemption" (which is a last moment action by the debtor to repay the entire mortgage debt, including all interest payments) does not exist in New York.

Non-Judicial Foreclosure by "Power of Sale" Option

Effective since July 7, 1998 another rare foreclosure remedy has become available - non-judicial foreclosure by "power of sale." The "power of sale" clause, pre-authorizing sale of the property upon non-payment of mortgage debt, must be included in the mortgage contract language. There is an accelerated schedule of four to six months to complete the foreclosure under this option.

Other New York Real Estate Laws

Before a potential buyer submits an offer on a home, the real estate agent must provide a "Real Estate Transfer Disclosure Statement" to the potential buyer. The document includes all equipment (refrigerator, smoke alarm etc.) included in the house, as well as potential hazards.

In July 2002, New York issued a number of anti-predatory lending laws aimed at protecting buyers - prohibiting the charging of points and fees exceeding 6% of the total principal financed amount and prohibiting the use of single-premium credit insurance for financing.