In a competitive Mid-Hudson Valley housing market, these tips help prospective homebuyers

Nivea Lobato Colon, 42, and her husband Josh Colon, 44, purchased their Hopewell townhouse in 2022.

When they went into the process as first-time homebuyers, there were a lot of things they didn't know and the process was stressful.

They were outbid five times.

When their offer was finally accepted, their prospective closing date was pushed out an extra two months.

But, Lobato Colon said, "To me, it was worth it."

There may be hitches in the process, but being prepared for the unexpected as a first-time homebuyer will help, Lobato Colon said.

Here are some other ways to avoid surprises and successfully purchase your first home in the mid-Hudson Valley.

Keep in mind closing costs

Isabel Alves, the president of the Dutchess County Association of Realtors and an associate broker with RE/MAX Town and Country, said there are costs prospective homebuyers don't always think about, like closing costs. "They don't realize that they need to have an extra 3 to 4 percent just for the closing costs," she said.

"The closing costs in New York are astronomical."

Alves recommends people start saving and putting money aside in a special account they won't touch for closing costs, so when the time comes, they have it ready to go.

Watch out for hidden fees

Alves also suggests her clients not only take into account the closing costs, but any hidden fees a lender may have when they apply for a mortgage.

"They should find out all the fees that the bank charges them," she said, "some banks charge more than others."

Research interest rates

Similarly, when applying for a mortgage, Alves tells her clients to research the banks with the best interest rates. Your payments over time will be better, she said, as they're not going to be as high in the long run if they're locked at a lower value.

"The interest rate will ultimately depend on what their credit score is," Alves said. If you are not doing so well, she suggests going through a credit repair program, with some banks and mortgage officers offering six-month programs to do so.

Furthermore, having bad credit, she said, will make it much more difficult to qualify for a mortgage. You don't have to be in the 800s, she said, but having a decent score will ensure you aren't going to be paying extra.

Stick to your budget and expectations

In addition, Alves warns prospective homebuyers to never go above what they're qualified for, so they aren't stuck later on not being able to pay a mortgage, and in case of emergency, they can still meet the expense of the home.

"I always advise my clients to not over exceed what they can afford," she said.

Don't expect to find a house the first time you go looking, Alves said, it will most likely take looking at multiple homes before you find the perfect fit.

You found the home you want. Don't forget the final steps

When you settle on the place where you'd like to purchase your first home, Alves said to buy in an area that supports you building equity on the home, especially if you are going to put money into it to fix it up and sell a few years later.

"A lot of buyers are purchasing their first home, but it's not their forever home," she said.

Once you've picked the home you'd like to make yours, Alves also recommends hiring a professional, licensed home inspector, to see whether the home is in perfect condition or what needs to be addressed immediately, what can be done within the next year or what can wait for the next 5-10 years.

Along with this, when hiring an attorney to negotiate the contract of sale and represent you when closing the purchase, Alves said to hire locally. "If you purchase in Dutchess County, hire an attorney from Dutchess County who knows the laws, the rules and the regulations," she said.

If you are preapproved and can start looking for a home today, Alves said it could take at least four months. "Prepare at least two months before you are able to have an accepted offer and then two months after the accepted offer," she said.

Boost your competitive edge

When purchasing your first home, you may want to think about saving more for the down payment than anticipated. Alves said an agent will advise their sellers to look for the buyers that are offering the highest down payment, as well as the type of loan the buyer has, such as a conventional loan, FHA loan or a VA loan.

Conventional loans, FHA loans and VA loans are the most common types available to homebuyers, according to Forbes. A conventional loan is not backed by a government agency, but is presided over by a credit union, private bank or other financial institution. FHA loans are backed by the Federal Housing Administration, but they do not fund these loans, and are for those who wouldn't qualify for a conventional loan. Similarly, VA loans are government-backed and are specifically for those who have served. The U.S. Department of Veterans Affairs partially guarantees these mortgages.

Alves said with conventional loans, down payments can range from 3.5-70%, and the percentage you're able to pay will make a difference against the competition.

"The sellers are going to look at the amount of the offer, they're going to look at the down payment, and they're going to look at the type of loan or whether it's cash," she said.

Of course, she noted, cash buyers will most likely win over another offer made, as they don't have to be dependent on the bank approving that person for the sale.

Alves said the market isn't as intense as it was during the last year of the height of COVID-19, with offers "that are $50,000 to $60,000 over the asking price," she said.

However, even now, she is seeing higher asking prices and multiple offers on homes priced properly and in good condition. "There's still a fair amount of competition, not as high as a few months ago or last year," she said.

To help your competitive edge in the current market, Alves suggests planning ahead, researching the resources available and shopping for the right agent who will best support your goals.

Nickie Hayes:NHayes@poughkee.gannett.com: 845-863-3518

This article originally appeared on Poughkeepsie Journal: 6 tips for prospective homebuyers in mid-Hudson Valley