Buyer 101: COOPS -Who's Your Foe, The Board or The Banks?

Buyer 101: COOPS -Who's Your Foe, The Board or The Banks?

This is a great question to ask while the mortgage turmoil is occurring across the US.Prior to the turmoil Coop Boards were typically harder to get an approval from, much harder than than  banks. Well, as of Fall 2009 the banks are taking the lead and are making COOP buyers work even harder to get a mortgage commitment.

COOP REQUIREMENTS

If you are interested in buying a Coop apartment, there COMMON requirements that you may know of. Some are:

• Board Approval which is a review of your application (your basic profile, work family). If you fortunate you may have a sponsor unit which do not need Board approvals but have there own pros and cons.
  (Please view my next BUYER 101:COOPS PURCHASE-SPONSOR UNITS PROS & CONS)
• Minimum Down payments are  typically at 10%, but less frequently, some Coops have higher minimums  as high as, 20% to 25%, or more
• Income Requirement restrict individuals with incomes too low or too high depending on the Coop. Minimum income requirements are usually control the ability of buyer to afford the unit; Maximum income impairments are usually for starter Coop to promote ownership among those with lower incomes

BANK REQUIREMENTS

• PRE-TURMOIL Banks followed the 10% down format and left it up to the individual Coops to require higher down payments. As long as the person was credit worthy and had reserves in the Bank.
• MORTGAGE CRISIS is causing the banks to more restrictive than the Coops Boards. If buyer credit SCORES are not close to 700, the banks may require the buyer to have 20% down. So a basic rule to use now is if any of your scores is below 700 serious consider 20% or you may an increased likeliness to be denied the loan. Even if you have the reserves in the bank and enough income.
  
  Of course consult a mortgage professional familiar with Coops Sale in Your Area to See Best Your Option

MILTON D. JOHNSON
Licensed Associate Real Estate Broker
917.676.6421
www.milton4realestate123.com
www.facebook.com/milton4realestate123
www.twitter.com/milton4re123