Dos & Don'ts For Home Buyers
The following Dos and Don't for Buyers comes from a lenders perspective. For Manhattan coop buyers finances will be even more scrutinized by the coop board than by the lender.
Most coops have even more stringent financial requirements than lenders so don't assume that a loan commitment from a lender will necessarily approve you for a coop purchase. A Co-op board will require complete financial disclosure. They will look into your financial history, current and past income, assets, liabilities and references when evaluating your board package.
Buying-coop-be-prepared-and-qualified
Coop-board-requirements
Tips to Help Pass A coop Board Interview
Most coops have even more stringent financial requirements than lenders so don't assume that a loan commitment from a lender will necessarily approve you for a coop purchase. A Co-op board will require complete financial disclosure. They will look into your financial history, current and past income, assets, liabilities and references when evaluating your board package.
Dos & Don't s For
Buyers
Do:
· Continue
to make housing payments on time: Until closing is set, continue to pay your
mortgage or rent in a timely manner.
· Stay
current on all of your bills: Maintain good credit by paying bills on time.
· Verify
all information on your credit report: Request a copy of your credit report to
verify the accuracy of the information in your accounts.
· Make
yourself available for conference calls with creditors: Depending on the
accuracy of your report and the time line of settlement, credit companies may
need to verify further information via conference calls. Remember - your credit
may be pulled prior to the closing of your loan.
· Save
pay stubs and bank statements: Underwriters will require no less than two
consecutive months of pay stubs and bank statements for qualification purposes.
· Alert
your lender if your job, salary, or compensation changes: If your income
changes during the application process, alert your mortgage advisor
immediately.
Don’t:
Establish
any new credit:
1. Apply
for, or open new credit cards: Opening new credit will not only add additional
inquiries to your report, but will also negatively impact your score. Even if
an account reflects a zero balance, a trade line has been added to your report.
2. Co-sign
for a loan or line of credit: When co-signing for a loan or line of credit, the
payment will show up on your credit report and count against your debt.
3. Don't misrepresent anything. Don't omit negative information. It is better to be upfront and explain something derogatory from the past in coop board package than to have the board discover it.
· Close
or consolidate credit card accounts: Closing credit card accounts or
consolidating debt can have a negative impact on your score as a result of
decreasing your credit capacity.
· Increase
balances on your existing accounts: Because a new report may be pulled just
days before closing, the updated balances will be reflected resulting in
resubmission of the loan. This may cause not only a delay in settlement, but
can also result in a denial of the loan.
· Make
large deposits or transfers without proper documentation: Lenders require a
“paper trail” for any large deposits or account transfers. (Acceptable
documentation includes but is not limited to deposit slips, copies of checks,
loan paperwork, etc.)
Typical Co-op Board Requirements: (what the board is looking for)
- 1. 25-30% Income to debt ratio. Housing costs should not be more than 25% -30% of income depending on the particular coop.
- 2. At least 1 years worth of mortgage + maintenance in liquid assets or two years of maintenance after closing costs
- 3. Increase in salary from previous year, potential future earning.
Buying-coop-be-prepared-and-qualified
Coop-board-requirements
Tips to Help Pass A coop Board Interview
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