Forum: Mortgage
October 30, 2009
Coop & Condo Breakthrough Loans
Thought I would post guidelines for those interested in combining coop and condo units.
Combining of Two or More Units (Combo)
Written Approval by COOP Board for the Combination of the units is required
Appraisal:
Appraised Value to be based on an "as completed" combined unit per the plans and
specs
Appraiser required to use other similar size units for comps
Address if typical for market and implication on marketability
Renovation Funds would be held in escrow until completion- Estimate would come from general contractor.
Completion should occur within reasonable period post close.
Generally a maximum 180 day timeframe
Loan is not eligible for sale to Agencies or Shelf until work is completed.
Extensions possible but require justifications
Combos are considered as a Refinance
Unless units to be combined are purchased together
Three day rescission period applies
Special Lien Search & Closing conditions
There are two cases where we do a co-op (or condo) breakthrough, with #1 being more common:
1. Someone owns a co-op unit and wants to buy the unit next door (I've even seen breakthroughs where they buy the unit above or below their current unit). We treat the loan as a cash out refi, with our loan being used to pay off the current loan and purchase the new unit. We escrow for the actual construction work (the break through) to be done post closing.
2. Someone who does not own any units currently buys 2 adjacent units and combines them. This is treated as a purchase, obviously.
In either case, we must comp out the unit adequately and also show that this is somewhat common and customary to the area.
A few key points to keep in mind:
- the co-op has to approve the combination of the two units
- they'll need an estimate to remove the kitchen and create the doorway
- an escrow is created to make sure the work is completed
- the end transaction should be one loan for both units (treated as a cash-out refi)
- typically both units will be combined into one stock certificate however it's ok to keep two stock certs as long as they are both referenced on the security agreement.
October 27, 2009
Sales Contingency?
I'm selling my apartment and want to buy a new one, but need the money from my sale to go through to be able to pay for it. I know people are now doing mortgage contingencies but what about sales contingencies?
October 17, 2009
Good Mortgage Broker Needed
Hi there, can anyone recommend a good mortgage broker; particularly one that specializes in SONYMA and FHA loans?
Thanks!
October 16, 2009
Bank Refi Runaround
Has anyone experienced resistance with their banks in trying to refinance their current mortgages? From May until now I have had alot of issues with HSBC, really what is their incentive? Today I was told they do not have to follow Freddie Mac/Fannie Mae guidelines, is this true?
How Are Mortgage Brokers Paid?
i assume it's standard for borrower to pay a fee upfront....what about a percentage of the points you purchase to lower interest rate? what else will the borrower expect to pay to the mortgage broker? thanks.
October 6, 2009
FHA Loan Question
Has anyone RECENTLY closed on a multifamily house with an FHA loan? Was the amount you could borrow limited by your anticipated rental income? (ie total monthly payment has to be no greater than 85% of your rental income?) I've spoken to numerous mortgage brokers who have given me slightly different stories on current FHA requirements.
Buying 3-Family w/ 2 Others
Any advice/recommendations on how to purchase a 3 family brownstone with 2 other people? There is a garden duplex with a basement and 2 floor through apartments. The purchase price is $1M. My husband and I intend to live in the duplex. Cousin will have one of the units for rental income and another family member will have the third unit to live in. How do we divide up the ownership/costs? Plans are to finance it together...Thanks for the input
October 1, 2009
Downpayment as a Gift
I know this topic as been approached before but I hope to ask this in a more comprehensive way. In order to obtain a mortgage with help from parents in the form of a down payment gift, what series of events has to happen and what issues do we need to understand? For example, are there tax implications? If so, how can we not have this burden (would defeat the purpose)? Would it be better to just put the money in my bank rather than declare it as a formal gift? If we're ready to search for homes, what needs to happen first? Do we find a mortgage broker or bank to get pre-approval? Does a real estate agent come first? How does the "gift" roll into this process? When does that happen? Co-op or condo?
I'm sure I'm missing some things here and there so any advice would be helpful.
Thanks in advance.