New York City Co-ops and their Mortgage Rules
New York City is indeed a nice place to reside in especially if you're young and filled with vigor. New York City is popular with co-ops. Instead of getting a house or a condo, more likely you will find a co-op. So what is this? In New York, 43% of non-leased housing is comprised of co-ops. This is not different from purchasing a home or a condo. Of course, there are variations. Like you are not buying the property itself instead you are purchasing a percentage of the property. In other words, it's like you're buying a share in a corporation which is owned by the occupants. Acquiring more shares is possible if your unit is pricey and physically appealing.
Technically, a percentage in a co-op isn't considered a mortgage. You have to secure a personal loan and this is what pays your share in the corporation. Even though, this really isn't a mortgage lenders will refer to this as a mortgage loan.
Unlike a conventional mortgage, obtaining a co-op will have cheaper closing costs. Apart from this, you will not have the hassle of paying a mortgage recording tax in the state of New York. Home and condominium owners are required to pay this which is at least 2% of the price upon purchase.
You have to be approved two times so that you can buy a co-op. Like a bank, there is a board that needs to qualify you. They have to see if you have enough income to pay for your share and that you are financially stable. The lender has to approve your loan too. Often times, buyers are required to pay at least twenty five percent of the purchase cost. Properties that are located at posh areas similar to the Upper East Side may go as high as fifty percent.
This is actually the same as to buying a home or any other property. There are just little differences that you have know of. Know what these are so that you will know what you are getting into. Being aware of the details will help you decide clearly plus will let you get that property that you've always wanted in New York.