American Dream: Make the Largest Down Payment You Can Afford

Four Great Reasons to Make the Largest Down Payment You Can Afford

If you’re looking for a new home, you’ve probably heard lots of advice about down payments. About how it’s okay to just have a five percent down payment — you’ll still get approved. About how you should make the down payment as small as possible to avoid cash flow problems. In truth, you’re actually better off making the largest down payment you can possibly afford. Even if you have to slice up other areas of your budget, save for a few more years before you buy, or take a second job on the weekends, it’ll be worth it in the end. Here are just four reasons why you should make the largest down payment possible.

You Can Avoid Useless Insurance Premiums Although you can buy a house with as little as a five percent down payment, it’s in your best interest to make a much larger down payment if you can. Mortgage insurance premiums can be as high as one percent of the loan’s value, which means until you’ve invested 20 percent of the home’s value in equity, you’ll have to pay an extra one percent every year. If you pay at least 20 percent of the purchase price upfront, you’ll be able to avoid having to get private mortgage insurance – so you keep more of your money in your own pocket.

You’ll Pay Much Less Interest The less you have to borrow, the less you have to pay back— for more reasons than one. When you take out a mortgage, the interest rate applies to the principal amount that you owe — and over time, the interest can run on top of interest, quickly outpacing the original sum. Having a larger down payment means the interest applies to a smaller sum. And that means it accumulates slower and ends up being a smaller amount over time.

You’ll Have More Ammunition In A Bidding War Offering up a larger down payment is also a great way to make sure you get your dream house, especially if it’s a popular property with multiple offers. The seller isn’t just going to consider who offers the most money – they’re also going to consider which buyer is most likely to get a mortgage. After all, failing to get a mortgage is one of the most common reasons why real estate deals fail. If you can show that you’re able to make a larger down payment, you’ll have a better shot at getting a mortgage – and that means sellers will prioritize you over other buyers.

You’ll Get A Great Start On Building Equity Your home equity is equal to the difference between your home’s fair market value and the amount of debt invested into the home. If you don’t have enough equity in your home and home prices in your neighborhood fall, you may find yourself in a situation where you owe more money on your home than it’s worth —a phenomenon known as negative equity. By making the largest possible down payment you can, you’ll have a great head start on building your home’s equity – which may help you profit if you decide to sell in the future. Buying a house isn’t easy, but making the largest down payment you can afford will give you a great financial head start on home ownership. Want to learn more about how to afford the home of your dreams? Contact your local mortgage professional today at 888-670-6791 for practical advice to help you maximize your down payment.l

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Fill-In Workers Who Kept Subways Clean in Pandemic Hoping to Get Picked Up

BY JOSE MARTINEZ , THE CITY

Since the height of the pandemic, jobs cleaning the subway offered some New Yorkers a way to collect a paycheck as other avenues closed. But for many of the mostly immigrant workers who have supplemented MTA station and car equipment cleaners since the spring of 2020, the end of the line is drawing near. “That’s what they tell us,” an Ecuadorian cleaner who asked not to be identified by name told THE CITY in Spanish while waiting for a No. 1 train at South Ferry terminal in Lower Manhattan. “Like with everything else, there is an end — what can you do?” MTA officials said the transit agency’s latest budget plan includes an increase of 845 car equipment and station cleaner positions through early 2024 as it prepares to transfer COVID cleaning duties to in-house employees and eventually phase out the contracted cleaners. An MTA spokesperson said the agency paid close to $100 million to third-party contractors in 2021 to back up a workforce hit hard by absences, deaths and retirements stemming from COVID-19.

A contract cleaner works as riders leave an E train at World Trade Center. Sept. 2, 2022. Hiram Alejandro Durán/THE CITY The contract cleaners were hired for jobs that, under normal circumstances, are performed by union workers. “It was an emergency situation,” Matt Ahern, a Transport Workers Union Local 100 official, told THE CITY. “Between people that had COVID, people who were out because of close contact and people not coming to work, it was crazy. “And anybody that could walk out the door and retire did.” In 2020, agency records show, the MTA spent more than $124 million on contractors who hired workers to clean and disinfect trains at terminals and another $68 million for workers to disinfect touch points in stations. Transit leaders have repeatedly said they expect that money to be reimbursed by the Federal Emergency Management Agency. Calls from THE CITY to several MTA cleaning contractors were not returned. Both MTA and TWU Local 100 officials said contract cleaners have been encouraged to apply for in-house jobs as transit cleaners. “Another large class started [last month] and they’re preparing for everything to get transitioned back,” Ahern said. “The contractors will be gone by the end of the year — at this point, it’s a matter of getting the new hires in quickly enough.” The push to hire more cleaners comes as the number of cars soiled by urine, waste and other fluids is rising back to pre-pandemic levels — even though weekday ridership only hovers around 60% of what it was. There were nearly 1,900 “soiled car” incidents through the end of August, according to MTA figures. In contrast, there were 1,504 such incidents in all of 2017 and 2,058 in 2018, as THE CITY reported in 2019. “Who’s going to get on a subway car that’s filthy?” Ahern said. “Cleaning is paramount in bringing ridership back.”

‘I’ve Seen a Lot Down Here’ Several cleaners at Manhattan subway terminals said they are hoping to stick around as full-time employees. “The MTA should take us into consideration, because we’ve got experience at doing a delicate job,” a female cleaner who asked not to be identified told THE CITY in Spanish.

A mostly Latin immigrant workforce stepped up when COVID-19 threw the MTA for a loop and required more cleaning with less staff. As their time runs out, many are looking for more permanent, union work with the transit agency.

She said she took the contractor job in the early days of the pandemic and has since been posted at a pair of terminals in Manhattan. “I’ve seen a lot down here,” she said. “But the worst thing I have seen is people who have gone to the bathroom on themselves.” Starting pay for the MTA cleaner jobs is $19.03 per hour, according to a July job post, and increases to $31.71 hourly after six years of service. The Ecuadorian cleaner, who is in his 60s, said he has applied for one of the jobs in hopes that he can stick around full time. He said he currently earns “about $21 an hour” doing similar work in the system through a contractor. “At least here, I have been able to keep working,” he told THE CITY. “Now, I’ve got experience and I know what I’m doing when it comes to disinfecting the train.”

‘Overwhelming’ Response According to the MTA, the agency’s budget through early 2024 restores some cuts from prior years, along with increasing staffing. “The MTA undertook the unprecedented effort of disinfecting subway cars and stations daily throughout the height of the pandemic to keep employees and riders safe,” said spokesperson Kayla Shults. “The authority is using the lessons learned in ensuring we use best practices in our ongoing cleaning efforts.” Ahern said the initial response to the recent cleaner job postings was “overwhelming,” with more than 45,000 applicants putting in to refill an in-house pool of workers that was depleted during the pandemic. The in-house positions, he said, are now “being filled as fast as possible.” He added that contract cleaners who apply may have a better chance of being called back, though they legally cannot receive hiring priority. “It’s key to keep the operation running smoothly,” Ahern said. “We have everybody back to work.”l This story was published on September 12, 2022 by THE CITY.