mkop's Profile
Author's Posts
May 6, 2008
Cost of Conversion: General Estimate
I would very much appreciate rough estimates of how much it would cost to convert the top three floors of a brownstone to a single unit. We plan to use what is now the shared stairs as a private stairs (by opening up the wall). We'll need to install a kitchen on the first floor, take out kitchens on the top two floors, put up some walls and closets and do cosmetic renovations on the bathrooms. The current interior is in fine shape and the electric, heat, etc. plumbing are all in order and do not need work. Thank you.
April 9, 2008
Two Family v. Three Family
I am looking for opinions on the pros and cons of owning a two family versus a three family. My husband and I were looking for a three family (because it can potentially bring in more income and because we don't need as much space as many two families offer). However, our broker suggested that three family brownstones are harder to sell and may cause us a problem 5-7 years down the road when we want to sell. His rationalle is that many potential buyers are scared of being landlords to more than one unit. He further believes that a two family home will appreciate better.
I would like to hear some opinions on the matter. What has been your experience? What would you do?
Author's Comments
For a jumbo mortgage on a 3 family, with a 20% down payment and credit score above 700 (plus a good debt to income ratio) we were quoted in the high 6's and low 7's. Definitely not 8.
Posted by: mkop at April 10, 2008 2:09 PM in response to Jumbo Mortgage Rates...
The quote was this Monday and was for a single mortgage (not a combo) with no points (or so we were told). I generally found that major banks don't always give competative rates (have a friend working at a major bank). We are working with Apple Mortgage.
Posted by: mkop at April 10, 2008 3:51 PM in response to Jumbo Mortgage Rates...
4:26 and 4:27, are you a mortgage broker for another company? Apple Mortgage definitely does jumbos on multi-families. We had several discussions with them about rates on a single family versus two and three-family.
Posted by: mkop at April 10, 2008 4:59 PM in response to Jumbo Mortgage Rates...
Apple Mortgage is not theapplebank
Apple Mortgage is located on in midtown, on 44th and their website is applemortgagecorp
Posted by: mkop at April 10, 2008 5:55 PM in response to Jumbo Mortgage Rates...
Thank you denton and Lauren. We estimated 100-150 per sf. Glad to hear our estimate was within reason.
Lauren, how long did the conversion take? Did you work with an architect or did you rely on a structural engineer and a general contractor? Thank you in advance.
Posted by: mkop at May 6, 2008 7:35 PM in response to Cost of Conversion: General Estimate
Responses to Author's Forum Comments
Guest 10:43 you are wrong, small thrifts sell loans to the gses as much or more than the money center banks, including the fhlbs.
Posted by: guest at April 11, 2008 12:10 PM in response to Jumbo Mortgage Rates...
This is 5:56 from yesterday.
10:43 is WRONG about the new limits "only apply[ing] to single family dwellings (homes)."
The CURRENT conforming limits are here:
http://www.fanniemae.com/aboutfm/loanlimits.jhtml
Like I said:
"3-Family OLD CONFORMING limit (NOT new higher one that is called jumbo-conforming) is $645,300."
The NEW jumbo-conformign loan limits have been raised for ALL building types (1, 2, 3 family) to the numbers I stated.
http://www.ofheo.gov/newsroom.aspx?ID=418&q1=0&q2=0
So much misinformation on this blog by clueless people! How about 5 minutes of Googling before you say someone is wrong?! Geez.
Posted by: guest at April 11, 2008 12:22 PM in response to Jumbo Mortgage Rates...
12:22. you're the man. I've emailed my broker already. Though 2-4 families seem like a niche product, we'll see if he can get it done.
I'm looking to refi my 2 family house (current mortgage is >$533,000 at 6.75%). We'll see.
Posted by: lincolnlimestone at April 11, 2008 1:06 PM in response to Jumbo Mortgage Rates...
12.22 here ... thanks dude.
I'm in the same boat as you but with a 3-family.
I've been quoted 6.00% to 6.75% but I'm holding out.
I think 'old conforming' rates are headed down at least another 25 to 50bps and unlike the new conforming-jumbos (which sunset 12/31/08) the old conforming levels didn't change and won't change.
The Fed will lower rates at the next meeting and eventually that will lower conforming rates (once investors stop freaking out start buying agency paper again).
Good luck.
Posted by: guest at April 11, 2008 1:52 PM in response to Jumbo Mortgage Rates...
12:22 is right, but the mortgage rates for amounts falling between OLD conforming limits and NEW conforming limits are a hybrid between the low standard rates and the higher Jumbo rates. You will not find a sub-6% for mortgages of these sizes.
Posted by: lincolnlimestone at April 11, 2008 2:57 PM in response to Jumbo Mortgage Rates...
We've been looking at jumbo mortgages for a 2 family house. We found that two loans (1 conforming + HEL or HELOC) were universally cheaper than one jumbo loan. There are great tax savings also when you split the loan into two. Call the banks directly to get a better deal than you can get from a mortgage broker. We went with Commerce because they offered us a fixed rate home equity loan at a very good rate. The other banks wanted us to get a HELOC that floated with prime, but we preferred the certainty of a 30 year fixed.
Posted by: guest at April 12, 2008 1:07 AM in response to Jumbo Mortgage Rates...
I doubt the jumbos are coming down any time soon no matter what the fed does in a downward direction. Why? because if the fed is easing further it is because the balance sheets of the banks are decaying even faster, they need to pull back their leverage urgently. Giving someone $1m at 6% over 30 years just isn't worth it, they'd rather keep the $50k or whatever it represents in capital.
if the fed starts raising rates the market for non conforming loans might start to ease a bit.
the housing market needs to bottom and prices need to start rising slightly from whatever the bottom is before the jumbos go down.
Posted by: guest at April 12, 2008 8:52 AM in response to Jumbo Mortgage Rates...
We just got a 7/1 jumbo ARM on a 3 family at 5.5%, the letter came in yesterday. The mortgage amount limit is 1MM though, so we had to put down a bit more than 25%, for our purchase price. Whatever your purchase is, if a loan amount of 1MM works for you and your credit is good, you should be able to get it. Nicole McCarthey at Trachtman and Bach is our contact and has been great, offering lots of options.
Posted by: Colonel at April 15, 2008 1:15 PM in response to Jumbo Mortgage Rates...
We just got a 7/1 jumbo ARM on a 3 family at 5.5%, the letter came in yesterday. The mortgage amount limit is 1MM though, so we had to put down a bit more than 25%, for our purchase price. Whatever your purchase is, if a loan amount of 1MM works for you and your credit is good, you should be able to get it. Nicole McCarthey at Trachtman and Bach is our contact and has been great, offering lots of options.
Posted by: Colonel at April 15, 2008 1:16 PM in response to Jumbo Mortgage Rates...
New Fannie/Freddie limits theoretically apply to mutifamily homes, but no bank is obligated to offer loans at those rates. Sorry.
Posted by: guest at April 16, 2008 1:36 PM in response to Jumbo Mortgage Rates...
Slopefarm, good advice on asking for a list and time on the market. The broker is our broker, so he wasn't trying to sell us anything at the time, he just suggested that a two family may be better. I guess the mortgage rates are also lower on a two rather than a three.
Posted by: mkop at April 9, 2008 4:15 PM in response to Two Family v. Three Family