Many people confuse down payment with deposit. A 10% deposit is required on most purchases in NY when a contract is signed. The 10% (sale price) deposit remains in the seller's attorney's escrow account until the closing.
A down payment "down" is the amount of cash that someone puts down (equity) and finances the rest through a mortgage.
The 10% down in an ad means that the condo only requires a 10% down payment and they will allow up to 90% financing for purchasing in their building. While 10% down is a typical condo requirement in Manhattan, many lenders today will not finance 90%.
Before you start looking to buy a condo or coop apartment in Manhattan you need to be pre-qualified by a lender or mortgage broker. The mortgage broker will tell you how much you can afford. They will tell you how much they will loan you and how much you will need to put down regardless of the buildings requirement.
Working with an experienced local buyer's agent will help you with the search, through negotiating offers to a successful closing.
Mitchell Hall, Associate Broker
The Corcoran Group
Now that we understand that, getting a 90% loan may be the difficult thing as Banks are far more stringent in their lending practices. Many (most) Banks want buyers that are putting down more than 10%. Banks don't want to run the risk of foreclosure and in an effort to not loose out, they may require a much larger deposit. Good luck.
DOM PASCUAL, J.D., ESQ.
ASSOCIATE REAL ESTATE BROKER
"We combine excellence with intelligence."
Green Homes NYC
New York, NY, 10001
Cell: (631) 741-2764
Facebook Profiles: Dom Pascual; Manhattan Broker
*Disclosure: I am a buyer's broker, I work for you not the seller or management!*
There are buildings that advertise 10% down, looking to bring in uninformed buyers. The buyers see this as an ideal opportunity to secure a great deal with the minimum down requirement. Here is the thing, I don't know any bank that will write a loan 10% down on a building that is not already eligible for a Federal home loan program like FHA. So you put down 50K on a 500K unit. You think you are getting a deal because you are working directly with the seller's broker. (they get paid to grab your money) You secure your Pre approval, you set a closing date, hire a lawyer, and expect everything to go smoothly. Truth be told, You just fell into a trap! Your money isn't your money any longer. It is known as earnest money. Money that has been accepted in consideration of a closing!. Money that is Kept due to a clause known as "in consideration". Do your self a favor. Get a Buyer's agent! Their job is to look out for your best interest, not the seller's best interest as is often the case with the "in house" Agent! You want proof? it is right here on this board!
Halstead Property, LLC
Interesting for me to read these questions from other parts of the country. In our area we see this sometimes to indicate that a home won't qualify for FHA financing and that the buyer needs to be prepared to use conventional financing.
As all of the others have said its 10% of the agreed purchase price. I.e. If the purchase price is $100K then 10% wil be $10,000. This is your down payment only.
It means that you have to put "down" in cash 10% of the seller's price, and you finance the rest through a 30-year mortgage. Your monthly payment will usually include your mortgage payment and the monthly maintenance on the unit, whether its a co-op or condo. If I can be of any other assistance to you, don't hesitate to call 24/7 @ (917)-941-0210. Sincerely yours, Glenn @ V & V Real Estate
Licensed Associate Broker
Accredited Buyer Representative
GREEN Designated Agent
William Raveis Legends Realty Group
10% is also the typical number you put down in NYC as a good faith deposit on contract signing to be held in escrow, normally by the seller's attorney.
I point out this confusion because while most contract deposits are still 10%, most banks will not lend the 90% balance on a 10% down payment any longer.