Home Buying in 07302>Question Details

HomeBuyer, Home Buyer in Jersey City, NJ

Mandalay? Tenants in the house will it be a problem to get mortgage.

Asked by HomeBuyer, Jersey City, NJ Fri Aug 17, 2012

Hi,

I signed a contract on a 3BR in the Mandalay. First, how do you feel the building is compared to others on the waterfront, esp in terms of holding values, and then in appreciation prospects?

Also, there are tenants in the house that I requested in the contract to 'stay on' after closing. I am renting and the lease is not over until next year. The lease is in my friends name but I pay.

Has anyone had similar experience? Was the mortgage approval a problem?
Thanks.

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Answers

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It sounds like you have an excellent real estate agent who helped steer you to a fine unit in a very popular waterfront building. The number of three bedroom units in downtown Jersey City it quite limited, so demand is excellent. At any one time there are but a handful of these on the market!

On the mortgage issue, what your realtor was probably concerned about was not your ability to get a mortgage, but the possibility that you would end up paying a higher rate because the tenancy would result in the characterization of this as an investment property.

That said, the market in Downtown Jersey City is exceptionally strong and if current trends continue, values should continue to rise. But what is really important here is that what you describe sounds like a home that will bring you years and years of pleasure.

Take it from someone who has bought and sold several properties over the years -- no one has the crystal ball from which to postulate which buildings, or areas, will prosper and which ones will not. Like works of art, or fine wines, if you buy what you like, you should be well served by your investment!
0 votes Thank Flag Link Fri Sep 14, 2012
Thanks Art! :)
Flag Fri Sep 14, 2012
Thanks for the responses.

My realtor sad he didnt realize the tenants situation before and lets see what the LO says, so I was seeking your opinions.

This is a 3BR/2BA corner unit in Mandalay, and paid in the low 700s. Its on a lower floor, but there is nothing blocking the view from the balcony to the water - there is nothing in between except the building pool and then the Boardwalk.

Let me get your opinion on this please: For lower 700s, I had a choice of buying 2BR/2BA unit in the newset buildings on the JC Waterfront - A Condos, Trump Plaza, Shore Lane etc. , OR, buy this 3BR/2BA unit in this building thats 10 years older.

So clearly more area was one factor, but my choice was mainly driven by something else. I found Mandalay very unique in its location - its not near the water, its right on it. So I thought I could pay in the 700s and get a 3BR/2BA and live right on the water, or pay the same money and get a 2BR/2BA in the newest buildings and still not be on the water.

The kitchen on this unit is smaller than the newer open layouts, which is not very encouraging.

What are your thoughts on this? Sorry if this is too much detail but I am a first time home buyer whos excited and anxious about my decisions at this time. Thanks.
0 votes Thank Flag Link Fri Aug 17, 2012
Sorry, just saw this posting now and I wish I had seen it earlier. Do you know the parking lot to the south of the building is proposed to be the site for Harborside Towers 8 and 9 and so if you are on the lower floors, you will likely lose sunlight and view? You can check with JC planning board.
Flag Sun Sep 16, 2012
What does your Realtor® say. You should be able to get the loan approved as long as you are upfront with your LO. Just let them know that you are unable to move in until next year and they will set you up with a NOO loan.
0 votes Thank Flag Link Fri Aug 17, 2012
Did you work with a realtor on this transaction? If you did, he/she should have been able to answer these questions for you before you signed the contract..

I personally like the building very much and think it compares favorably with other waterfront buildings, even the newer ones. Without knowing what you are paying for the unit, I can't answer your question about appreciation or holding values.

Good luck with your new purchase.
0 votes Thank Flag Link Fri Aug 17, 2012
Mortgage approval is not a problem when tenants are already in place at a property. Waterfront buildings like The Mandalay have a good number of units owned by investors who lease them, or homeowners who have outgrown them.
There are only problems when the ratio of rented apartments to owner- occupied units exceed bank standards and that can differ depending on the type of loan you are getting. I don't know what those numbers are currently at Mandalay, but I think they're OK.
This is a good building with a solid HOA and reputation. Values hold well, and like any purchase in this current market, they will only appreciate.
0 votes Thank Flag Link Fri Aug 17, 2012
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