Archive for Condop
Buying A Manhattan Apartment Soon? Want A Co-op or Condo Mortgage? Better Plan Ahead
Posted by: | CommentsAccording to a new J.D. Power and Associates study the average time required to approve and close a home loan has increased to nearly 47 days, compared with approximately 30 days in 2008. The reason? Increased scrutiny of loan applications and higher origination volumes driven by increases in refinancing. Not surprisingly, the longer wait times are fueling a decline in overall customer satisfaction with primary mortgage lenders.
The study also finds that credit scores are now higher among mortgage customers and the percentage of loan applicants who have been faced with requests for additional documentation has increased considerably—to 45 percent in 2009 from 33 percent in 2008.
“While the more cautious approach to underwriting mortgages is justified, the longer turn times and more numerous requests for information tend to have a negative impact on satisfaction,” said David Lo, director of financial services at J.D. Power and Associates. “Good underwriting and delivering a satisfying customer experience are not mutually exclusive, and some of the negative effects of a tightened lending environment can be mitigated by simply improving communication between lenders and customers.”
The 2009 Primary Mortgage Origination Satisfaction Study measures customer satisfaction in four key factors of the mortgage origination experience:
- application/approval process
- loan officer/mortgage broker
- closing
- contact
According to responses from more than 3,400 consumers who originated new mortgages within the previous 12 months here’s the top mortgage lenders BB&T (Branch Banking and Trust) 783 out of 1,000, Wachovia 781, National City Mortgage 769, SunTrust Mortgage 769, Wells Fargo 754, Flagstar Bank 744, GMAC Mortgage 744, Bank of America, 741
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Is it Difficult For A Foreign National To Get a Mortgage in New York City?
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There is a common misconception that it is more difficult for foreign nationals than for American citizens to get a mortgage in NYC. In fact, there are some restrictions, but it is perfectly possible for foreigners to get mortgages for New York City home purchases.
Foreign nationals obtain a mortgage like anyone else
Foreign nationals can approach local NYC banks, national lenders, credit unions and mortgage brokers to apply for a mortgage. Not all lenders offer foreign national programs, but they are readily available.
As a foreign national, one must be prepared to put a down payment as high as 40% of the purchase price—required by the lender because it typically will only loan 60-80% of the purchase price. Interest rates are reasonably priced and there are no forbidden property types so you can finance a condo and a co-op just as easily as a single-family home. Some lenders will require you to prove your Visa status or type of Visa you possess that gives you permission to be in the United States, be it for a business or a pleasure trip or to come to the U.S. to work, study, conduct business or immigrate.
Foreign nationals who hope to purchase co-ops will need to go before the co-op board, just as citizens do. The co-op board may impose its own requirements such as requiring a green card, U.S. tax returns and other conditions. Co-op restrictions may make it more convenient for foreign nationals to purchase condos because the bylaws and rules of condo associations are typically less restrictive than those of co-ops.
If the purchase is strictly for investment purposes I would recommend the purchase of a condo. That said, in New York City, there are “condops” (a cross between a coop and a condo) which may allow you the flexibility as an investor but at a lower cost.
The bottom line is that a foreign national can obtain mortgage financing just like a The bottom line is that a foreign national can obtain mortgage financing just like a U.S. citizen would in order to establish a NYC mortgage. Find a lender that offers foreign national loans and apply for the mortgage. Then sit back and wait for information to be processed—just like a U.S. citizen would have to do.
Condops: Co-ops for the Free Spirit
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Co-op, Condo or Condop?
If you yearn for the freedom of condo living but your pocketbook won’t stretch beyond the co-op price range, a condop may be perfect apartment for you. To understand the differences and what they mean to your budget, here’s a quick rundown on the basics of modern living in Manhattan: co-ops, condos and condops.
Co-ops are by far the most common form of apartment ownership in Manhattan – over 70 % of available apartments for sale are in co-op buildings. Co-op means cooperative ownership. Rather than owning your apartment, you become a member of the corporation which owns the entire building and you own shares in that corporation. Monthly maintenance fees cover building expenses including heat, hot water, insurance and staff salaries. In addition, your maintenance charge also includes real estate taxes and your apartment’s share of the underlying mortgage on the building. A portion of these maintenance fees (taxes and interest on the building’s mortgage) are tax-deductible.
Co-op boards play a huge role when you want to purchase or sell your home. You will be required to submit detailed financial information, tax returns, and personal and business reference letters and appear for a personal interview in order to gain the approval of the board before you can purchase your home. In addition, some boards may not allow you to sublet your apartment and may even have a say over the selling price, since a below-market sale could affect everyone else’s investment.
A condop is a co-op with less restrictive condo-type rules.
A Condo, short for condominium, is an alternative choice for apartment ownership. The number of available condos has grown in recent years, especially in new construction. When you buy a condo, you own your apartment outright just like you would own a single family house. You don’t have to go through the board approval process. And once you’ve bought, you have more control over your home. Usually, you can rent it out to anyone you choose and when you are ready to sell it, you don’t need to deal with board approval for your buyer as you do in a co-op.
Monthly maintenance fees -called common charges- are usually lower than co-op maintenance charges, but don’t provide any tax deductions because there is no underlying mortgage on a condo and you pay property taxes on your apartment directly to the city.
So what’s a condop? Simply put, a condop is a co-op with less restrictive condo-type rules. With condops you still need to play well with others and you own shares in the co-op but the rules are often more relaxed than the standard co-op. Condops, like most condos, may allow you to finance a higher portion of the price by requiring lower down payments, and usually there will be no high-stakes personal interview with the board.
In a condop, like a co-op, some of the monthly maintenance fees are tax-deductible but like a condo you’re usually relatively free to rent your apartment, use it as a pied-a-terre, may be able to have live/work space and may be able to sell your property more easily. Prices for condops are usually lower than comparable apartments in condos.
Not all condop buildings have these flexible rules, so you need to study individual listings carefully when looking for condops, and be sure your buyer’s broker and attorney are familiar with their structure.
