Financing NYC Condos

If you are ready to make the move and purchase one of the many NYC condos currently on the market, there has never been a better time than right now. Interest rates are at an all-time low and NYC condos are at their lowest prices in years. All of which makes for an opportune time to get your own little piece of the American dream, but only if you qualify for financing.

New York City is a place like no other, and that applies to its housing and lending options as well. There are several factors to consider before committing to the purchase of a condo. In order to get the best deal and the best rate, you need to thoroughly understand what all is involved in your getting qualified for condo financing. Ideally, this process should start a good two to three months before you actually plan on purchasing, in case you run into any unforeseen issues. For qualification purposes, your lender is going to run your credit, check your work history and factor your income and expenses; this is done to confirm you do qualify and for how much. Most lenders that loan on NYC condos are looking for a credit score of at least 740, for Private Mortgage Insurance (PMI) purposes; if you are not in that range, you may have to do some credit clean-up to raise your scores. In some cases, you might be able to get away with a lower credit score, but only if you can put more money down towards the purchase.

Regardless of where you go to obtain financing, the steps you must take are all going to be the same. The lending guidelines are strict when it comes to NYC condos, mostly because of the high risk of default on this type of property. To make up for that risk, lenders now ask for bigger down payments, higher credit scores and a bevy of other stipulations that must be met prior to loan approval. You still have choices as to the type of loan product you wish to obtain, but keep in mind that if you plan on going with any of the government-sponsored enterprises (GSE), such as FHA, Fannie Mae or Freddie Mac, the condo project you choose must either be an approved condo project at the time of purchase or the project must meet certain criteria. If you want to bypass the guessing game, you can search Fannie Mae for the current list of approved NYC condos.

Once you find the perfect condo, and before you make an offer, make sure to get all of the particulars on the project, particularly what additional maintenance or association fees you are expected to pay. All of these charges must be factored into your loan's debt-to-income ratio, and you have to fall within the strict limits set by the lender. An overlooked fee of just $25 dollars can sometimes get your loan denied. You definitely do not want this to happen once you are already in contract; having to bow out of a purchase might mean you have to forfeit your earnest money deposit. Another important fact to consider is that condo loans usually take longer to close because of all the criteria that must be met. To protect yourself and your interests, make sure your real estate agent and your mortgage broker are both familiar with the complexity of purchasing a condo, and all it entails. Buying NYC condos is not rocket science, but it does require a team effort and skilled dedication from everyone involved in the transaction.