Home Buying in 11234>Question Details

Keith, Home Buyer in Brooklyn Heights, Br...

I have $15k saved for a downpmt and closing costs. I'm looking to buy a co-op. Am I going to need to save another $10k to afford the DP and closing?

Asked by Keith, Brooklyn Heights, Brooklyn, NY Mon Mar 25, 2013

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Madeline Padovano’s answer
Hi Keith - well there are not too many for $62,000 - but you never know. not in Brooklyn Heights at least. I suggest you save some more. But if you send me your email I will forward anything I find
in that price range for your consideration. Good luck in your search and happy savings.
0 votes Thank Flag Link Mon Mar 25, 2013
Hi Keith,

In all probability you will need to save more. Most banks require you to put down 20% on a purchase today, and they will also want you to have 6 - 12 months of mortgage and maintenance payments left in the bank after closing. Some co-ops have even stricter requirements (I know of several in Brooklyn Heights that require a minimum down payment of 25%).

So even if the co-op you were buying cost $100K, you would need a minimum of $20K for the downpayment, as well as several thousand more for closing costs (attorney's fee, bank fees, etc.), plus the required amount left over.

One way to avoid this high down payment requirement is a loan through the FHA, which requires only 3.5% down. However, the FHA does not finance co-op purchases, only condominiums (and only certain ones) and houses.
1 vote Thank Flag Link Mon Mar 25, 2013
Be aware that a mortgage pre-approval letter is required in order to determine your price range and for any offers to be taken seriously, therefore visit with any licensed loan officer and see exactly what your budget/expenses can be expected. Keep in mind when purchasing co-ops, boards do have their own financial qualifications that must be met in order to be approved, and each building is different.
1 vote Thank Flag Link Mon Mar 25, 2013
Keith, not sure what price range you're saving for, but most co-ops will require 20% down payment. Some condos will work with as little as 3.5-5% down payment, as long as the condo's financials meet conventional guidelines. If the financials do not, you'll need a 20% down payment to make it work.

I suggest you meet with a Loan Officer and allow him/her to review your credit, income & asset documents, to determine what you're qualified for. This is the only way you can really determine how much you'll need for down payment and closing costs.

If you need a Loan Officer, I'm available to meet in our Brooklyn offices. Good luck!

If my response was helpful, consider clicking BEST ANSWER!

Javier Meneses
Senior Loan Officer
NMLS #23130
310 Crossways Park Drive
Woodbury, NY 11797
(516) 606-9648
0 votes Thank Flag Link Mon Mar 25, 2013
Dear Keith:

Many co-ops have a minimum down payment requirement of 20%. Hence, you will most likely have to find a co-op without such a requirement, and that can be like finding a needle in a haystack. Aside from that, you need to get your self pre-qualified by a mortgage banker to find out exactly how much you can borrow and what you "closing costs" will be.

For most real estate deals carrying a mortgage, the purchaser's closing costs will be about 5-6% of the mortgage amount so be prepared for that. Once you find out how much you can borrow and how much you can spend, you have to figure out the percentage you will be putting down and then make sure the co-op you are looking to purchase in will be willing to allow you to purchase with that type of down payment. Again, if you are putting down 20% or more, you do not have to worry about that so much.

If you are putting less than 20% down, here is a hint.... you will need to find a co-op that is being sold by the "sponsor" or that has "no board approval." If I can be of further assistance, please let me know. Good luck!

Mitchell S. Feldman
Associate Broker/ Director of Sales
Madison Estates & Properties, Inc.
Office: (718) 645-1665/ Cell: (917) 805-0783
Email: MitchellSFeldman@aol.com
0 votes Thank Flag Link Mon Mar 25, 2013
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