Forum
« Throw a log on the fire: two fireplaces renovated Cold apartment »
February 14, 2008
Is 95% financing still possible?
I am from CA and newish to Brooklyn. I am wondering if it is still possible to get 95% financing from banks. Lending laws have obviously been getting stricter and I have heard that NY is particularly tough.
My husband and I make $180k, have excellent credit, plan to be here a few years at least, and would love to buy a 1 bedroom condo in Park Slope, Boerum Hill, Ft. Greene, etc. Do we have a chance with only 5% down or do we need to wait and save at least 10%?
And, if the bank will finance us, will a seller or developer sell to us with only 5% down?
(and yes, separate from the 5%, we have money for closing costs and emergencies)
Thanks!
Comments
Sure, I'm doing it, and I have a lousy credit rating.
There are a lot more variables to approval of a mortgage than down payment, income, and credit. For example income to front and back debt ratios, records of assets, payment history, etc factor in to a mortgage.
Your condo and coop board will probably be more restrictive than your lender. This is why I am making my purchase straight from a coop sponsor -- I can make whatever financing deal he will accept, not the coop.
I recommend a book called "Mortgage Confidential" by David Reed for the actual mechanics of this mortgage stuff.
Posted by: Smokychimp at February 14, 2008 3:21 PM
We're in the process of re-financing our mortgage and this is what we have been told.
If you have
1) good income (you do)and are not self employed
2) good credit (700+)
3)low debt to income ratio (28%)
4)fall within a confirming mortage (max 417K for a condo)
....you can even get 100%
However, most sellers want at least 10%... some motivated ones will take 95% financing.
Look into new condo developments, they are sitting on the market longer and are generally more flexible with financing.
Hope this helps!
Posted by: kdabrowski at February 14, 2008 3:59 PM
I forgot...
Anything over $417K morgage is in jumbo loan territory, and we're being told by lenders they are difficult to obtain without a 20% down.
We live in Prospect Heights and you can still get 1 bedrooms here for that price.
Smokeychimp, if you have a good mortgage broker please post info. here.
Thanks
Posted by: kdabrowski at February 14, 2008 4:13 PM
Didn't the size of jumbos just go up to over $600k?
Posted by: guest at February 14, 2008 4:44 PM
The law to increase jumbo loans just got signed into law but won't be implemented by lenders for 3-6 months at the earliest.
Posted by: guest at February 14, 2008 4:54 PM
Not yet but soon - George just signed the bill today, so probably take a few weeks to get up to speed.
Posted by: guest at February 14, 2008 4:56 PM
I wasn't aware that condo board set downpayment amount rules - think that is just coops. (You don't need board approval to buy a condo, even if it isn't a new develpment, if it is a true condo, and not a condop). Call a large mortgage broker (not a small neighborhood one) and ask them - they'll tell you what's available. If it is condo you want, ask banks directly.
Posted by: guest at February 14, 2008 6:22 PM
How does a couple earning $180,000 a year not have enough for at least 10% for a down payment? I earn $85,000 a year and have a kid...still managed a 20% down payment on my 2 BR in the Slope. Go for the $12 bottle instead of the $30 bottle at the wine shop, make your own cup of coffee in the morning at home, instead of Starbucks, and you'll have your 10% in no time.
Posted by: guest at February 15, 2008 9:33 AM
9:33 - thanks for your tips but we don't have the money saved yet because we only just finished our educations and 2007 was the first year we had incomes like that!
Posted by: poorgirl at February 15, 2008 10:48 AM
Dont worry poorgirl - most people here think if you make that kind of $ you must be spoiled and rich. They cant fathom the huge investment of time and money it takes alot of people to get to that education and income level.
Posted by: guest at February 15, 2008 11:24 AM
This is a digression, but 9:33 - a couple making $180k in NYC, with (presumably) student loans to pay in addition to the high cost of NYC living and very high NY/NYC taxes, is NOT rich. It will take them 3-5 years to come up with 20% for an apartment at current NYC price levels. Which is one indicator, in my opinion, of just how overvalued NYC real estate is - young, educated, professional two-income couples who don't either (a) work in finance or (b) come from wealthy families simply can't afford to buy a home here (esp. a co-op) without enduring years of living like college students to save a down payment. Not that this is really unfair, but it sucks nonetheless.
Posted by: guest at February 15, 2008 11:48 AM
It's also an indicator of just how terribly expensive education is, especially if you go for a graduate degree, if you aren't rich and have to finance it with loans. Had me mucho loans from age 18-49 - took 31 years to be done with 'em. If I hadn't sold a Park Slope apartment in my last move, which allowed me to finally be done with 'em, I'd STILL have student loans.
They are right to try to buy with little down - equity appreciation (either a lot or a little) is the best way to offset loans.
Posted by: guest at February 15, 2008 12:18 PM
Hi,
Yes condos may be easier but one thing I learned about new construction condos a few years back - we had 10% to put down, and couldn't get a mortage because the building was not 50% sold yet and banks would not take the risk. Keep in mind this was back in '03 when the banks were lending money to anyone. Of course by the time the building was 50% sold so was our dream unit and we didn't like the remaining inventory. Just something to keep in mind if you are looking at new construction condos.
Posted by: bklyn_girl at February 15, 2008 9:49 PM
There's ways around everything, you just need to be familiar with the laws. We're heavily vested out on the east coast, and there are some funky laws around condo owners according to the old rulebook, so banks were giving us a hard time when we wanted to cash out on one of our condo invenstemnts. We went to a guy we had met many years ago and did a great job for us (didn't break our back in closing $ and got the thing done quickly, just knew his stuff backwards and forwards) and sure enough he knew the law they were using to block us from finishing the loan we wanted. He uses all banks (a broker, I guess?), but he's worked for all the major lenders directly, too. He took our case before a bank and talked to the underwriter team and explained the loophole in our case and poof! the thing was done.
Posted by: guest at July 17, 2008 1:30 PM
His name is Yale Buckner, by the way, he's with with 'Michael Rand & Associates,' an affiliate of Remax realty. You can get ahold of him at 877-LOAN-606, he's great to work with
Posted by: guest at July 17, 2008 1:32 PM
Post a comment
Please be patient while your comment is published. It may take a moment.