Profile picture for Tarendra

Mortgage for Coop/Condo?

I am planning to buy 2 bed coop in NJ.
1. Does rates for Coop is higher than house?
2. My banker offers 4.75 rate for 30yr Fixed below is my profile:
    Property price: 120K; Down payment: 10%; Credit history: Excellent  
    Do you think, this is best rate I am getting today?

3. Does 5/1 is the best option, if I am planing to stay that coop for around 5 years and planning to buy bigger condo/home.
  • July 12 2011 - Edison
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Answers (5)

Profile picture for Tarendra
Thanks Everyone for suggestions.  I got 4.5% Interest rate from Wells Fargo. Based on all replies, I believe, it is fair.
  • September 28 2011
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Tare,

In my opinion if you can get a 4.75% 30F for 4.75% on a Co-op with only 10% down, I say you did pretty darn good. Just be sure you can get mortgage insurance on that Co-op, or you'll have to come in with another 10% down.

Happy funding, Rudi
  • July 14 2011
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Profile picture for Ray Stevens
The rate is a little high for a 30 year fixed coop pricing.  I am seeing 4.375% to 4.5% rates.

Mortgage insurance is available through MGIC and pricing at about $110 per month.

ARM pricing is obviously better (about 1% lower) but even if you are planning to buy bigger, the real question is what will you do with the property?  If you plan on keeping it and renting it out, 30 fixed is the way to go.

With coops and condos, call on the management association and ask the following questions:

1.  How many units are converted to rentals?  Should be less than 50%
2.  How many unit owners are deliquent on their maintenence fees?  Should be less than 14%
3.  Any pending lawsuits?

Wrong answers now on in the future will make buying and selling condos in this development very very difficult.  Condos are a risky property type in today's economy.
  • July 14 2011
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HI,

I am your neighbouhood realtor at keller williams.
I prefere you shoud go for condominium then co-op
as prices are way down and so do intre.rats.
call for more information.
  • July 14 2011
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There are fewer lenders that are offering COOP mortgages and/or understand them so there is less competition, thus the ability to charge a slightly higher rate.  That said 4.75% is not bad.  The big thing to make sure of is that the lender has a Mortgage Insurance provider lined up.  Those companies and even more restrictive and you do not want to go all the way to closing and then find out you need to come up with another $12k.
  • July 12 2011
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