SONYMA, the New York state first time home buyer’s mortgage

I had always been under the impression that there are really good deals out there for first time home buyers.. at least that’s what I thought until we actually became first time homebuyers at which point I realized its a bit of an urban myth.  None of the banks or mortgage brokers we spoke with were offering us any special rates or deals based on our virgin status in the world of home ownership -  until we found SONYMA that is.

We stumbled accross SONYMA while looking on the HSBC website for the prevailing rates… 6.7, 6.3, 5.3, 6.5…wait- BACK UP! 5.3 for something called “SONYMA”. What is that and how do we apply?

Turns out that SONYMA stands for the “State of New York Mortgage Agency“, and they have several low interest rate loan programs for qualifying first time home buyers in New York State.  Yay, thats us! Even more unbelievable than the low interest rate is that for just a slightly higher rate (5.8 rather than 5.3) SONYMA will pay all of your closing costs– and in NY, where you are required to put a year’s worth of property taxes in escrow at closing, that is a considerable amount of cash. Approximately 17k in our case.

It may seem that SONYMA is be too good to be true, and in some cases it is.  The agency has extremely exacting guidelines as to the maximum price of the house and the maximum combined income of the household. Fortunately for us, in both cases we fall just inside the limits (due in large part to the fact that I have been unemployed since our move back up north from Ft. Lauderdale.)

We just finished submitting the paperwork for our SONYMA loan application… and I have to say I’m terrified it will be rejected. Not that we should, but apparantly our Debt/Income ratio is about 1% more than they would like to see. Hopefully rather than outright rejection they will come back and give us a chance to pay down some of our debt like our car loan or student loans to bring the ratio in line. Or even better, they will give us the loan outright.

Keep your fingers crossed for us!

2 Responses to “SONYMA, the New York state first time home buyer’s mortgage”

  1. Hello,

    I am in the same boat as you, trying to get a SONYMA loan. First time homebuyer and really anxious. Did you get approved with the SONYMA loan?


  2. Hi Charles,
    I should have blogged an update, but no, we didn’t get approved. Its a long story, but basically our loan officers at HSBC kind of screwed it up for us. They kept telling us we needed more income so that our debt to income ratio would be right, but in the end we got rejected because we had TOO much income. Apparently SONYMA takes into account your potential future earnings for the next 12 months, and because my husband gets a fairly large bonus, they figured it would be larger this year. Ironically, they wouldn’t let us use the bonus as income because its not “guaranteed” but our loan officer said to supply the offer letter with it in there. And in the end I think that’s the thing that put us over the income threshold. :(

    Best of luck to you though, I hope you get approved, its a great program!

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