Buying coop and putting down 65% and financing rest, MY DTI is 33% but will have 1 mil in investment accts and1 mill in ira accts after closing In

Asked by Byroni10, Brooklyn, NY Mon Jul 17, 2017

1 yr I'll be 70.5 and will have an additional $36,000 yearly added to my income. Will coop bd reject me due to DTI

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Kathy Burgre…, Home Owner, Westchester, NY
Mon Jul 17, 2017
I'm the VP of my co-op Board in Westchester + a recently retired realtor. You should be fine with your DTI. To calm your nerves, I will tell you what our Board looks at when we review buyer applications:

Start with NET income (after tax deductions - take home pay)
Subtract: monthly mortgage amount (if any)
monthly maintenance fee
monthly parking fee (if buyer is paying for this)
monthly student loan payments (if any)
monthly credit card bill (we average this if past amounts vary a lot)
monthly commuter costs (MetroNorth, PATH, LIRR + subway if needed)
utilities (we use typical ConEd bill for that size co-op unit)
TOTAL = amount left from paycheck after the above items are deducted.

You need to know that co-op Boards do NOT want to accept buyers that appear to be living paycheck to paycheck. That is cutting it too close. Even with our Board, we accept buyers who have some money left to pay for food and other daily expenses.
We also verify that buyers have some emergency savings for unexpected costs (car repairs, medical bills, etc.)

What our Board has been struggling with is age diversity. Unfortunately, our building is 60% elderly (55+ years) because not many young people are able to save enough money for emergencies + have enough left from their net income for daily expenses. We want to approve more younger buyers and we have been but there have been some buyers who appear to be cutting it too close (very little savings and not enough left over paycheck money) and we have to reject them.

As you can see, we don't use DTI or credit scores to approve buyers to our building. That said, we do require buyers to have at least a 620 credit score. We also never contact any personal or business references.

You also need to know what concerns every co-op Board is whether this buyer is able to pay the monthly maintenance fee on time every month. Co-op Boards do have the legal authority to foreclose and evict you if you default on the maintenance fee. Co-op Boards don't want to spend legal fees going after a shareholder. It's much cheaper to review the finances BEFORE the interview. As a Board, we do remind buyers during the interview that we expect them to pay the maintenance fee on time every month.

I know co-op buildings in Brooklyn have additional amenities (pool, gym, etc.). Here in Westchester, condos have those amenities; most co-op buildings don't. Finally, I get the attraction of Brooklyn Heights but I hate to tell you - I feel you're wasting money buying in Brooklyn. Co-ops and condos are a fraction of the price in NYC AND you get twice the living space to boot. Example: our building is in a wealthy neighborhood and a 2 bedroom, 2 bath co-op with 1200 sq. ft. was just sold for $350,000. Eat your heart out. ;-) Oh and just to add to your jaw dropping with envy - we offer 1 parking space for $75./month + we're 2 blocks from the Metro North station which gets you to Grand Central in 27 minutes. And how much are you paying for that teeny size co-op in Brooklyn Heights??? I thought so. By the way, we're located in Larchmont / Mamaroneck.
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Thanks for your info. it was very helpful, I know that prices in Bklyn are high. I also have a condo in Florida and I could live like a king in a multi bedroom home there for what I'm paying for my apt. However, Bklyn is my home, I love it, my friends are here, so here is where I want to be. Its all a matter of preference and perpective
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