Condo Ownership - is a fee simple form of ownership, similar to a private home. You own the interior space of your unit and share ownership in the common areas, such as walkways, exterior space, etc. Condos come in a variety of styles, hi-rise, apartment, townhouse, gated community, etc. Condos generally have a lower maintenance charge, with utilities and real estate taxes being paid separately by the owner. Condos are easier to finance than co-ops and do not have down payment/income restrictions imposed by the condo board nor do they need board approval to purchase.
Co-operative ownership- is in common with other apartment owners as shareholders in the building corporation. Co-ops tend to be lower in price, with a higher monthly maintenance fee which normally includes heat/hot water, building maintenance, underlying building mortgage, amenities, and real estate taxes. A portion of the monthly maintenance is tax deductible due to the included real estate taxes, the percentage deductible is based on your individual ownership interest (apartment square footage) in proportion to the gross real estate taxes. Shares in the corporation vary based on apartment size. Cooperative ownership is more restrictive with regard to financial qualifications, pets, ability to rent, set forth by the board of directors of the corporation. Minimum down payment requirements and debt to income ratios vary by co-op; however a co-op may require a 30% down payment and a 4:1 income ratio. The ratio in simple terms would be total monthly expenses of the property and personal indebtedness not exceeding 4 times the income of the purchaser.
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