New York City First time Condo Buyer and Investor Part 2 -Getting a Mortgage Is Not All About You

1. What is the Condo Market
2. Getting a Mortgage Is Not All About You
3. New Construction Condos – What don’t I know
4. Buying as an Investment
5. How do I figure out if this is a good deal or not in 2017?

So what are we talking about when we say Getting a Mortgage is Not All About You? We often hear the buyers say, “Oh don’t worry about it, I can easily get a mortgage.  I have a good credit score and we are pre-approved already, I did it online!”

So, what are we talking about when we say that its not that simple.   What’s not simple about it is there is a 2nd step, an often overlooked step that can be problematic.  That 2nd step is that the bank will also want to approve the condominium building you are purchasing in.

STEP 1, the Easy Step:  You the buyer gets qualified.  This is the straight forward step, you will speak to the mortgage banker, provide them with all of your personal documentation and they will tell you if you are qualified and for how much.  

This is straightforward because based on your down payment, income, debts and credit history, you will get a close idea of where you stand with the bank.

ProTip: Use a Mortgage Banker that is Experienced with the New York City Condominium Market.  Using a mortgage banker or internet lender that is not familiar with New York City market and the idiosyncrasies involved here is going to likely cause you trouble.  There are a lot of pitfalls and challenging scenarios that an experienced mortgage banker will know exactly how to navigate for you.

Now that you have gotten yourself pre-approved you are ready to buy that condo! Here is where most people make a frustrating mistake because you are missing a crucial step in the process.

STEP 2, the step that can cause you lots of frustration,  the bank will also be looking to qualify the condominium itself. First they qualified you, now they will be looking to approve the building.

So what is so hard about approving the building? Each building is unique and different, no two buildings are the same. What is important to understand is that not all banks are as easy to work with.  The big conventional lenders often have the most strict guidelines and often have a conservative approach to approving buildings The process of getting the building approved involves asking for documentation from management companies, giving it to the bank underwriters, then waiting to see what they have to say.  Often you will submit the documents the underwriters originally asked for, and then they ask for more documents on top of that, now you are going back to the management again, Rinse and Repeat.  

Some Common Issues that Many Condo Buildings Run Into:  Too many Non-Owner Occupied Apartments, One Person Owns too Many Condos in the Building, Too Much Commercial Space in the Building, An Assessment or Lawsuit the Building is Involved In.

So What Should you do? This is where we can help you along the process, and mortgage lender you are working with are worth their weight in gold to make sure this deal happens for you.

Pro Tip: Before you make an offer, check the address of the building by your mortgage banker and see at the very least if the bank has that building on their “pre-approved” list.  Even if the answer is Yes, it’s approved, the bank could still ask for more documentation or updated documentation.

If you went in alone in the purchase, already have a contract signed, they are sending out an appraiser already, which you are paying for, and you get a call or email that you may not get the mortgage because there is something wrong with the building, and your mortgage contingency is coming up really soon, this will become very stressful for you.

You assumed that you would have no problems because you had your pre-approval letter, which is a common mistake, but its likely this could have been avoided.  

A huge part of the value of working with an experienced condominium agent is that we take you, we are guiding you on the journey of buying a condominium.  We know where the typical pitfalls are along this journey, one of them being the common issues with getting a mortgage.  We fill in the missing pieces for you that you didn’t even know about.

There are many aspects of the mortgage process that can delay or affect on your purchase, let’s discuss this now and be prepared! Let us help you and make this process as easy as possible.  

This is a five part series blog posts. You can read about by clicking on the links below:

1. What is the Condo Market
2. Getting a Mortgage Is Not All About You
3. New Construction Condos – What don’t I know
4. Buying as an Investment
5. How do I figure out if this is a good deal or not in 2017?

Call us at (917)837-8869.

View or No View for investor buying

Buying a Manhattan Condo as Investment – Getting the Application Approved- What nobody tells you

An often overlooked aspect of buying a New York City condominium as an investment is understanding what the rental application looks like for your prospective tenant.  

Why is this Important, Why should you Care?

It’s very important you understand both of these criteria because it affects the marketability of the apartment and your potential vacancy rate as an investor.

The vast majority of condominium buildings will require the tenant to be approved by the condominium board prior to being able to move into your apartment.  What this entails is submitting an application along with a variety of checks and supporting documentation proving their ability to pay the rent and this is where it gets interesting.

Every Manhattan condo building has their own package and every building works with different management companies that have their own standard package and set of fees. We are here to provide a sample items of what most of the condo will required.  There are a handful of major management companies in New York City that work with a lot of the condominium buildings as their property managers.  These big management companies tend to have a similar package of requirements and fees with the different buildings they work for.

So the perspective tenant sees your rental condo unit likes it and wants to move forward and present an application.  They ask for the rental application and we give it to them and then they see all of the fees involved just for the condominium board and management and all of the documentation they will need to provide to submit the package.

The perspective tenant see the following for example:

• $600 Processing Fee made payable to management
• $500 Administrative Fee made payable to the Condo Board
• $125.00 Credit Check Fee
• $125.00 Criminal Background Fee
• $50.00 Submission Fee to management
• $500.00 Move in Fee
• $1000.00 Move in Deposit
• $500 Move out Fee
• $1000 Move Out Deposit

Anything with Fee next to it will be non-refundable and all of these fees are on top of the minimum first months rent, one month security and likely broker fee the perspective tenant will be responsible for.  

And the condo rental application documents include:

• Last Two Year Tax Returns
• Employment Letter
• Financial Statement including every piece of supporting documentation
• Landlord Reference Letter
• Notarized Documents could be included
• Proof of Identification

Please understand, it’s important to fully understand the financial capability and any past tenancy issues your prospective tenant may have been involved in.  

Here is what nobody will tell you….

If the fees for your condo building are prohibitively higher than those in similar buildings around you.  The same buildings a perspective tenant is probably also looking at, they will be turned off by the costs involved to rent your apartment.  If they see they have to pay an additional $1500-$2000 in non-refundable fees to rent your apartment vs a similarly priced apartment across the street or in the neighborhood, a lot of tenants will pass on your apartment.

Or when they receive the application and see that all of the documentation required is way more than the other building’s they have looked at, it’s just another hurdle to overcome to convince them to take your apartment.

We find that tenants are typically driven by price in the rental market, if they can go directly to a building where there are not a lot of additional fees and the rental application process is streamlined, they will do it.

Some condo buildings will also charge an additional fee to the owner to rent their OWN apartment.  They will increase the common charge, 5-10% or they have a fee within the rental package that is designated for the owner to pay.

What we recommend and something we always ask for is to see the rental package prior to purchase.  So before you sign your contracts you can see what the current rental package looks like so you know what you are getting yourself into.  

We work with many buyers looking to find the right Manhattan condo investment, there are many aspect of buying the suitable condo that is important for buyers to know. By working with us, seasoned and exprienced Real Estate professionals, buyers can avoid many mistakes and stress in buying the right investment condo. Call us today at (917)837-8869.

Read on other helpful articles by click on the links below to learn more about Manhattan Condo market:

HOW TO BUY A NEW CONSTRUCTION CONDO IN NYC:

https://manhattannycondosforsale.com/how-to-buy-a-new-construction-condominium-in-manhattan-new-york/

MANHATTAN CONDO INVESTMENT TIPS FROM LANDLORD PERSPECTIVE:

https://manhattannycondosforsale.com/manhattan-condo-investment-tips-from-landlord-perspective/

BUYING MANHATTAN NY CONDO INVESTMENT TIPS

View or No View for investor buying

https://manhattannycondosforsale.com/buying-condos/

We always like to provide our new condo owner this checklist to ensure they are organized with their important documents.  After the closing, besides all the excitement of decorating a new apartment and setting up new electric/TV/cable account, we would like to remind new condo owners to organize important documents that pertain to their recent purchase for possible future use such as tax filing, refinance, resale and etc.

Here are some of the important items:

• Condo sale and lease application – If you have completed a condo sales application. It is a good idea to keep a copy of what you submitted to the management.
• Offering Plan/Amendments/House rules and financial statements of the condo – at the time of the condo purchase, the attorney represented you had completed their due diligence of the building, the attorney should have given you these documents at the time of closing. If not, ask the condo management for a copy.
• Closing Statement of this condo purchase – any documents you have signed at the closing, you should keep a copy. Most of the buyer’s attorney will send you a closing statement package with the deed of the property and other related documents you have signed.
• Loan application and Lender documents – This will be very useful if you financed your purchase for future resale or refinance.
• Home owner Insurance Certificate – If you obtain home owner insurance, make sure you have a copy of the certificate and insurance agent’s contact information.
• Lastly, a list of all the parties that participated in the purchase of your new condo- this list should have name and contact information of: Buyer, Seller, Buyer attorney, Seller attorney, Bank attorney, Mortgage banker, Bank name, Buyer’s agent, Seller’s agent and anyone else that played a part of this successful purchase.

Call us now (917)837-8869 or email us if you have questions about Manhattan New York Real Estate.

Other very helpful articles if you are thinking of buying a Manhattan New York condo:

• How to determine a good Manhattan NY condo investment?
• Use Local Expert for you Manhattan New York condo purchase
• What is included in my Manhattan New York Condo Common Charge?

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