Your first house, without the fog

Start with the monthly number, not the price

Most first-time buyers start by asking what they can afford to buy. The better question is what you can comfortably pay every month, including the parts nobody puts on the listing card. In the Hudson Valley the monthly cost of a house is principal and interest, plus property taxes (often $600 to $1,200 a month on a modest house here), homeowner's insurance, mortgage insurance if you put down less than 20%, any condo or HOA fee, and the utilities. Oil heat in an old house in February is a real number. So is a well pump.

A lender will tell you the most you can borrow. That's a ceiling, not a target. We'd rather you buy a house you can keep paying for in a year when the furnace dies and the car needs tires. Use our mortgage calculator with an actual tax figure from a listing you like, and see how it feels.

The loans first-time buyers use

You don't need 20% down. Plenty of people who buy their first house here put down far less. Here are the common types, described generally. A lender will tell you which you qualify for; we don't arrange loans and we don't get paid by lenders.

Conventional, low down payment

As little as 3% down for first-time buyers who qualify. Private mortgage insurance is added to the monthly payment until you reach about 20% equity, then it can come off.

FHA

A federally insured loan with 3.5% down and more forgiving credit requirements. Mortgage insurance usually stays for the life of the loan unless you refinance. Some older houses need repairs before an FHA appraisal will pass.

VA

For eligible veterans and service members: often no down payment and no monthly mortgage insurance.

USDA rural

A federal program for designated rural areas, with no down payment for buyers under certain income limits. Parts of Ulster and Columbia counties qualify; the village centers usually don't.

State and county programs

New York's state housing finance agency offers first-time buyer mortgages with competitive rates and down payment assistance, through participating lenders. Some counties and cities have their own grant programs, usually with income limits and a homebuyer class. Money runs out each year, so ask early.

Down payment assistance often comes as a forgivable second loan: you don't repay it as long as you live in the house for a set number of years. Read that part. If you sell or refinance early, some or all of it comes due.

How it goes, for a first-timer

1. Get your paperwork together

   Two years of tax returns, recent pay stubs, two months of bank statements, and an explanation for anything odd (a gift from a parent, a job change, a gap). Lenders love boring files.

2. Get pre-approved

   Talk to two or three lenders and compare their loan estimates line by line, not just the rate. You don't need one to tour, but we require a pre-approval letter before we submit an offer, the same as for every buyer.

3. Sign a buyer agreement with us

   A short written agreement, required everywhere since August 2024 before an agent can show you a house. It states what we're paid, says that's negotiable, and that we can't be paid more than that. Often the seller covers it. If not, we'll talk about how to handle it in your offer, so there are no surprises at closing. If you'd like to try us out first, you can sign a one-day touring agreement instead.

4. Look, and keep a list

   Most first-time buyers see 10 to 20 houses. Write down what bothered you after each one. Patterns appear.

5. Make an offer

   We'll look at recent sales with you and write it up. In New York the offer is short; the real terms go into the contract your attorney negotiates.

6. Hire an attorney and an inspector

   Do this right away. The attorney reviews the contract and handles the closing; the inspector tells you what you're actually buying. We'll give you several names for each.

7. Sign the contract and pay the deposit

   Usually 10%, though with a low down payment loan it's often less. It's held in escrow by the seller's attorney and goes toward your down payment.

8. Mortgage commitment, then closing

   The appraisal, underwriting and title work take four to eight weeks. Don't buy a car or open new credit cards in the meantime; lenders check again right before closing.

Cash you'll need at closing

Your down payment is only part of it. For a $400,000 house with 5% down, a first-time buyer here might bring something like this. These are illustrations, not quotes.

Two things work in your favor. First, sellers can agree to a credit toward your closing costs, within your lender's limits, and in a balanced market they often do. Second, the "mansion tax" (1% on homes of $1 million and up) won't apply to most first homes, and the 0.4% state transfer tax is the seller's to pay.

A condo instead?

Kingston has a small but growing supply of new-construction condos, and for some first-time buyers they make more sense than a house: no roof to replace, no driveway to plow. You pay a monthly HOA fee instead, which covers the building's exterior, insurance on common areas and a reserve fund. Ask for the budget and the reserve study, and find out whether a special assessment is planned. Unit 4B at The Foundry Lofts is a two-bedroom, two-bath loft built in 2023, listed at $415,000 with an HOA of $412 a month.

First-time questions

Coffee with June

June runs our free first-time buyer evenings at the Kingston office, 48 Stockade Row, every spring and fall, on Tuesdays at 6:30. Bring your questions and your worst-case budget. Or call her at (845) 555-0190.

Meet June The full buying process