Home Buying in 11234>Question Details

Mellanie Del…, Home Buyer in Brooklyn, NY

is it really required to pay 20% down payment when buying a coop? how about condo or single family house.?

Asked by Mellanie Delapena, Brooklyn, NY Wed Jul 17, 2013

first time buyer, interested in a 2-3 bedroom house, coop, or condo in 11234

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9
With all the respect in the world, I'd like to correct Madeline's response below. You do not need a 20% downpayment for a single family conventional mortgage. The fact is that you're able to go as low as 5%, you do not need 20%. Anything below 20%, you'll need mortgage insurance. In NY, if the loan amount, regardless of downpayment, is 80% or less of the appraised value, mortgage insurance is waived, again, regardless of downpayment amount.

If my response was helpful, consider clicking BEST ANSWER!

Javier Meneses
Senior Loan Officer
NMLS #23130
STERLING NATIONAL BANK
310 Crossways Park Drive
Woodbury, NY 11797
jmeneses@snb.com
(516) 606-9648 Cell
(516) 740-4478 Office
(516) 918-5383 Fax
4 votes Thank Flag Link Sun Jul 21, 2013
Co-ops themselves determine the minimum downpayment. You'll find that most co-ops will require a 20% minimum, and from time to time you'll run into some that require as low as 10%.

For condos and 1-4 family houses, the minimum downpayment depends on what loan program you're applying for. FHA loans require a 3.5% minimum downpayment, conventional loans you can do as low as 5% and conventional specialty or community loans,such as My community or HomePath can go as low as 3%. VA loans can go as low as 0% downpayment. If youre purchasing a house you can allost always use one of these programs. On both FHA and VA loans, condos must be HUD approved, which most the time they are not. When using a conventional loan for condo purchases, if the condo does not meet financial requirements set by Fannie Mae, you might be forced to a 20% downpayment so the lender can then do a limited review to get the deal done.

It's all a matter of allowing a Loan Officer to review all necessary documentation (tax returns, paystubs, bank statements and credit) so they can determine and advice you as to your best financing options. Pre-approving for a condo, co-op or a 1-4 family house are all totally different. You'll approve for different amounts depending on the property type.

Because you're not sure which way you'll go, I suggests you meet face-to-face with a Loan Officer who is experienced with financing all these property types. There are so many factors involved with financing co-ops and condos. I'm always available to meet face-to-face if you need a dependable and honest Loan Officer to help you. We have offices in Brooklyn, Queens, Manhattan and Long Island where I can meet. Good luck!

If my response was helpful, consider clicking BEST ANSWER!

Javier Meneses
Senior Loan Officer
NMLS #23130
STERLING NATIONAL BANK
310 Crossways Park Drive
Woodbury, NY 11797
jmeneses@snb.com
(516) 606-9648 Cell
(516) 740-4478 Office
(516) 918-5383 Fax
2 votes Thank Flag Link Wed Jul 17, 2013
Hi Mellanie
Yes it is, and some of them are 25% DP, as well has have a flip tax, which you will also have to cover, because you can no longer finance any flip tax.

for some condos, as little as 3.5% with an FHA mortgage, not all condos.

for a single family conventional mtg 20% - or 3.5% and up for an FHA

If you have any other questions please contact me directly. Good Luck
1 vote Thank Flag Link Sun Jul 21, 2013
Dear Mellanie:

For a condo or a single family house the amount of your down payment will depend on your qualifications. With a co-op there is usually a minimum down payment requirement policy that is determined be each co-op building on a case by case basis. The vast, vast majority of coops in Brooklyn do require 20% down, but there are some out there that are willing to allow for lower down payments. Those are harder to find and if you cannot go 20% down your options may be limited.

Caution: when purchasing a co-op always find out if the co-op has a flip tax or transfer tax. These are taxes and/or fees that the co-op charges the OWNER of the co-op when they sell. Although the buyer does not pay this. it does become a concern for banks because if you have to pay a flip tax it lowers the equity you have in the property. If the flip tax is too high your mortgage banker may require you to put even more than the 20% down. The bottom line is that when purchasing a co-op you should always find out the flip tax and transfer fees and make sure it will not be an issue with your banker.

If I can be of further assistance, please contact me direct. Good luck!

Sincerely,
Mitchell Feldman
Associate Broker/ Team Leader
Fillmore Real Estate
(917) 805-0783
MitchellSFeldman@aol.com
1 vote Thank Flag Link Thu Jul 18, 2013
Most co-ops do require 20% down, while others may require even more; there are some that allow 10% down. If a condo is FHA approved, 3.5% down is necessary; single family homes depend on the type of loan one would qualify for; therefore for personalized answers visit with any licensed loan officer; 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.
1 vote Thank Flag Link Thu Jul 18, 2013
with all due respect Javier please READ MY COMMENT BEFORE TRYING TO CORRECT IT. THANKS
0 votes Thank Flag Link Wed Jul 24, 2013
Hello, I specialize in selling co-ops for many years and this is a very popular question. Not all cooperative buildings automatically require 20% down, some are still 10%. Sometimes its required by the lender if your credit score is below 700. The condos are usually 10% down as well. Single family homes can be as low as 3.5% down if you qualify for an FHA loan or up to 10% if you're doing a conventional loan.

Simply go to a lender or two and find out what you qualify for because everyone is different.
0 votes Thank Flag Link Thu Jul 18, 2013
It isn't required that you put 20 percent down but it is strongly recommended. The more you put down, will in turn make your mortgage payment lower. It also shows the bank that you have the equity needed to purchase the home.
0 votes Thank Flag Link Wed Jul 17, 2013
Hi Meliane,
A first time home buyer can qualify for an FHA loan to purchase a condo, two family or three family home and make a minimum down payment of three and a half percent.

Phillip Benn
Kings Realty Professionals
7219 Ave N
Brooklyn NY 11234
347-526-3501
0 votes Thank Flag Link Wed Jul 17, 2013
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