Looking to purchase my first co-op. Advice needed. (agent, mortgage, mortgage)

[louie0406]

Looking at a few co-op's for sale in Westchester County, NY. I inquired about a few of them and was told by the real estate agent that the first step is to get pre approved to see what my purchasing power is which I am in the process of doing now.

Can anyone help me out and give me a brief rundown of what I can expect to encounter and some tips. Thanks in advance.

[willow wind]

Coops are a tough buy. You'll be interviewed by the coop board. Make sure you're squeaky clean financially.

When you buy a coop you're buying shares in a corporation and get a proprietary lease to use the space in that unit. Thus, the coop board wants to make sure you're financially stable.

You'll need a larger down payment than you would for a condo or single family home. Most lenders won't lend on a coop. So you'll be limited to whatever lenders you can find who will lend on a coop or who will lend on that particular building.

Try Chase, Bank of America, Sovereign, Apple Bank and National Cooperative Bank- especially the last.

[louie0406]

Originally Posted by willow wind

Coops are a tough buy. You'll be interviewed by the coop board. Make sure you're squeaky clean financially.

When you buy a coop you're buying shares in a corporation and get a proprietary lease to use the space in that unit. Thus, the coop board wants to make sure you're financially stable.

You'll need a larger down payment than you would for a condo or single family home. Most lenders won't lend on a coop. So you'll be limited to whatever lenders you can find who will lend on a coop or who will lend on that particular building.

Try Chase, Bank of America, Sovereign, Apple Bank and National Cooperative Bank- especially the last.

Thanks for this info.

I'm actually looking to acquire lending thru my credit union. My salary and financial portfolio are pretty good. Credit score is currently at 740. I have the down payment money in cash as well.

[berniekosar19]

Originally Posted by deevel79

Thanks for this info.

I'm actually looking to acquire lending thru my credit union. My salary and financial portfolio are pretty good. Credit score is currently at 740. I have the down payment money in cash as well.

Most co-ops require buyers to put down 20-25% of the purchase price, about the same as what most lenders require these days. But the range can be vast, depending on the co-op—anywhere from 10% down (very rare) to 50% or more at higher-end buildings.

Co-ops also expect you to have sufficient money left over (also known as ‘liquid asset requirements’). The required amount can range drastically, from a few months worth of maintenance payments to 1 to 3 times the purchase price of the apartment. Two years worth of mortgage and maintenance charges is about average in NYC co-ops; Westchester places will probably not be as stringent.

In addition, each co-op will expect you to meet a debt-to-income ratio, usually around 25%-29%. That means your total monthly payments--mortgage and maintenance--cannot exceed the specified percentage of your gross income. An excellent credit score is also required.

Add them all up, and you will find that the average co-op's financial standards are much higher than the average mortgage bank...a primary reason NYC co-ops withstood the recent recession so well.

[Alex mcmillan]

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