Martylup, Home Buyer in 11590

My wife and I are looking to help our daughter who lives in Washington Heights purchase an apartment. Are we?

Asked by Martylup, 11590 Fri May 23, 2008

better off with a Condo or Co-op? Would it be better for us to buy it or just help her buy it?

Martylup

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3
Buy a 2 Br @ 474-478 West 158th St...This co-op allows for parents to buy : )
I have an open house this Sunday bet 12noon-1:30pm for interested parties.

Exclusive agent for Roger Morris Apts in Washington Heights,

Leif Johansson
Agent-Barak Realty
ph 347 244 1620
em leif@barakny.com
Web Reference: http://www.barakny.com
0 votes Thank Flag Link Sat Jun 6, 2009
If you want to buy a condo and not live in it, the Lender considers this an investment property even though your daughter is the tenant. Hence, you will pay a liitle more if you have a good credit profile and a lot more if your credit is challenged. The Condo board requires you to disclose all rentals and you must follow their guidelines.
The result is that she is better off to qualify for the purchase using your documented gift funds. She must show income to carry the loan payments, taxes for the condo option and monthly fees for either option.
There are more loan programs available with condos. Depending upon her income she may qualify for low interest programs.
Coop boards generally restrict the number of rentals in each building. It may be more difficult to obtain both financing and board approvals.
0 votes Thank Flag Link Fri May 23, 2008
Martylup,

Either situation you suggest could work for you. I am a resident of the Morris Jumel Historical District here in the Heights, and there are a good mix of coops and condos here.

If you purchase a condo, you generally will get less space for the money, but will own real property, and that can make for easier financing and having to put down less money. Most condos will allow you to place a down payment of 10%. Most coops will require 20% or more, but there are some exceptions. Right now there is only one bank making loans where less than 20% is being put down, Wells Fargo. They have reigned in lending practices due to the credit and economic troubles that have been brewing for some time now. They will allow a minimum of 15% down right now. Condos have easier sublet policies should your daughter ever want to do such a thing and also require you to have less money liquid after closing. Some coops will want you to have 6-12 months of mortgage and common charges left in cash or cash-ready accounts in order to be approved for the building. Condo typically do not have any restrictions like that.

As to your question about helping her buy or buying for her...you can do either. If you purchase for her, she won't be building and establishing her own credit. Helping her buy by co-signing or gifting her money for the down payment will help her to grow her own solid credit history. Some coops will not allow parents to buy for children, only help...and even in that circumstance, there are some maneuvers you should be making with your money now, before you start looking and making offers.

This is a complex, but not difficult transaction, but one that requires a savvy broker. If you would like more information, or to see a couple of places, get in touch. I'd be happy to help a fellow Heights resident get settled down here. It's a great area!!!
0 votes Thank Flag Link Fri May 23, 2008
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