does the monthly association payment in a COOP building include mortgage payment? i know it includes maintenance, tax, and perhaps the underlying

Asked by Mark, Boston, MA Mon Nov 9, 2009

mortgage, but my question is more specifically: will i have to get a separate mortgage on top of this underlying mortgage?

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Jessie Cuddy, Agent, Dorchester, MA
Mon Nov 9, 2009

Generally with Coops there is what is called a blanket mortgage and depending on how the original corporation was set up, the blanket mortgage covers a portion of an individuals mortgage. So it is likely, again depending on the building, you will have to get your own mortgage. The asking price should include the portion of the blanket mortgage. So as an example if the asking price is $500K and the blanket mortgage on that particular unit covered $100K, and you had a downpayment of $50K you would have to get a mortgage for $350K. Also understand there are certain lenders who will write a mortgage on coops and you will have to qualify for the entire amount meaning... purchase price $500K; downpayment $50K, entire mortgage amount $450K. The lender will just want to make sure you are not in over your head.

Hope this helps.

Jessie Cuddy, Realtor
Boston Bayside Properties
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Ken Snyder, Agent, Boston, MA
Mon Nov 9, 2009
Coops are relatively rare in the Boston area but in general, the coop fee would include maintenance, real estate tax, insurance, etc. If the building itself has a mortgage, then the coop fee could also include your portion of that mortgage expense. When you buy a coop, you are not buying the actual unit like you do with a condo. Instead, you are technically buying shares in the corporation that owns the building, and allows you to live in the unit. The coop fee is somewhat like a membership fee. Because of this, the coop fee it usually significantly higher than the condo fee on a similar type of unit. Most of the time, this difference is reflected in a lower purchase price as compared to a similar condo.

If you are looking to finance your purchase, you'll want to first make sure that the coop allows for financing and if so, if they have specific down payment requirements (some buildings in NYC for example require cash only deals).

Assuming the coop board is OK with financing, you will need to get a mortgage specifically designed for coop purchases. I suggest you talk to a mortgage professional who is familiar with financing coops since this is an area with its own unique requirements.

If you need help with financing, please don't hesitate to contact me and I can put you in touch with someone knowledgeable who can help you. I'm also happy to answer any other questions I can for you on the buying process, the market, etc.

Good luck!
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