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How do Harlem coops and Harlem condos differ?
Invest In Harlem real estate?
Harlem real estate has become a popular investment. Harlem real estate is leveraged. You may pay only a fraction (as low as 10%) of what the property is worth when you buy it. Harlem real estate has utility. If you buy stocks or bonds, you cannot do anything with them; but when you buy property, you can use it until you sell it. For example, you can live in a house. However Harlem real estate is not liquid. You cannot sell it on short notice and be sure that you will get exactly what it is worth. If you hold 1,000 shares, you can sell 100 of them in an emergency, but you cannot sell a part of your house if you have an emergency.
How do Harlem coops and Harlem condos differ in terms of their form of ownership?
Real estate titles to Harlem coops and Harlem condos are described as hybrid forms of ownership because they include real estate elements that are owned by individuals and elements that are owned by a group.
The owners of Harlem condos hold title to the condominium unit only, not the land beneath the unit, so Harlem condos can be stacked on top of each other. All condo owners share title to common areas. Common areas include land, the exterior of buildings, hallways, roofs, swimming pools.
The owners of Harlem condos pay property taxes on their individual units. A property owners' association usually manages the complex and collects fees from all condo owners in order to maintain common areas.
If property is a Harlem coop arrangement, title to all associated real estate is held by a corporation. Buyers purchase stock in the coop corporation and are considered shareholders, not owners of real property. Each shareholder holds a lease to his unit that runs for the life of the corporation.
Taxes are paid by the corporation. Mortgages are normally held and paid by the corporation. Costs to operate the building are shared by shareholders. New cooperative shareholders must usually be approved by an administrative board.
How to look for Harlem condos?
Harlem condos are a common option for people who are moving on from Harlem apartments for rent to a place they can call their own. Buying for a condo is a big step on both an emotional and financial level. Therefore, take into account the following guidelines when you are looking to buy a condo.
Step 1 Take into consideration any specific requirements that you have such as an attached balcony or patio, laundry room, desired square footage, along with the number of bedrooms, bathrooms and closets. If you are a pet owner, search Harlem condos that have a lenient pet policy.
Step 2 Determine your budget and look for a condo that falls within your price range. Estimate how much you will need for a down payment and ensure you have the funds available. Also research and compare mortgage options.
Step 3 Browse through the classified section of the newspaper to look for Harlem condos for sale. Look for new developments, apartment conversions and re-sales.
Step 4 Contact a well established real estate agency to help with the condo search. Tell the agent your specifications and ask for a list of Harlem condos.
Step 5 Subscribe to condo magazines to get up-to-date listings in your area. Make a list of Harlem condos that interest you and notify your real estate agent to set up an appointment for a showing.
Step 6 Join Internet real estate forums to find resale listings. Post your condo requirements on the forum to allow prospective buyers to contact you.
Step 7 Use referrals and look into Harlem condos that are neighbor-friendly. Also look for developments that are highly recommended in city search polls. When you visit the condos, talk to the residents to learn about the atmosphere in the community.
Harlem condos, how much home can you afford?
Taking out a mortgage for one of the many Harlem condos on the market is probably the biggest hassle facing prospective Harlem real estate homeowners. The bank asks you all sorts of nosy questions about your income and savings, and after you've poured your heart out and shared all your money secrets, they might not even lend you as much as you need to purchase Harlem condos. The nerve!
Of course, they do have a point. Put yourself in the bank's shoes: If you were going to lend people money for Harlem condos, what would you want to know about them? Of course you'd want to know whether:
They make enough money to pay you back.
They've been trustworthy in the past.
They have something of value to trade, should they be unable to pay you back.
Congratulations: In financial parlance, you've just been introduced to the concepts of income, credit worthiness, and collateral -- the three main factors that go into the lending decision for Harlem condos. Let's look at each one, and how they affect what you can afford.
Do you make enough to pay the lender back?
Your lender will want to know not only how much money you have, but also how much you will likely make over the next 30 years. Also, what are your other debts? Do you owe money for college loans or credit card charges? Do you have any other assets? Things like stocks and mutual funds, or personal property like a boat or a car, are also considered in figuring out how much a bank will lend you.
Ideally, you'll want to come up with at least 20% of the value for Harlem condos as a down payment, to avoid things like mortgage insurance payments (also called private mortgage insurance, or PMI). But you probably qualify for plenty of financing arrangements that will get you into a new Harlem real estate home for as little as 3% of the asking price.
The lender will also plug your income numbers into a couple of formulas: the front-end ratio (having to do with your mortgage payments) and the back-end ratio (having to do with your debt).
For instance, let's say your gross income is $4,000 a month, and you have $400 a month in debt payments. A common rule of thumb is that they'll allow you to pay around 30% of your gross income toward your mortgage payment every month. This is known as the front-end ratio. In this example, 30% of $4,000 is $1,200 a month -- so, they'll reason, you can afford put $1,200 toward your mortgage payment.
Your debt ratio, or back-end ratio, on the other hand, is $400/$4,000, or 10%. That's not bad. They don't want more than around 40% of your gross income going to total debt -- mortgage, credit card interest, and other payments -- and in this case, your payments add up to 39%. (These ratios can vary somewhat; the ones given here are just examples).
Have you been trustworthy in the past?
Potential mates aren't the only ones curious about your past. Your lender wants to know your history, too, before deciding whether or not to commit. Your credit report -- a nifty little compilation of your personal financial history -- will reveal whether you have a track record of paying your bills on time. Before you even start shopping around for a loan, pull your reports from the major credit reporting bureaus by going to the AnnualCreditReport.com website. If you see anything unsavory, clean it up to make yourself more attractive to lenders.
Do you have any collateral?
Harlem condos you will be looking at to buy will generally be considered collateral for your mortgage. As a result, in case you can't repay the loan, the bank can decide to do something really nasty: foreclose on the mortgage and repossess the Harlem real estate house. You will find yourself out on the street -- with your dog, your La-Z-Boy, your collection of unpublished poetry, a couple of suitcases, and your toiletries kit. Your Harlem real estate house now belongs to the bank, and it is unlikely that anyone will ever loan you money again. Hot tip: Avoid this scenario at all costs.
Now, let's discuss your needs
How much you make, your creditworthiness, and how much collateral you have are all questions from the bank's point of view, because the amount of Harlem condos you can afford is largely a question of how big a loan you can afford. Now, let's look at a few things from your point of view.
Your timeline
To determine whether you should buy one of the Harlem condos, think about how long you're planning to stay in it. It generally doesn't make economic sense to buy if you're only planning to stay there for a couple of years. Since you'll be paying fees to buy and then sell your Harlem real estate house, it would have to appreciate in value very quickly while you're living there to make the entire deal financially worthwhile.
Your comfort zone
Before you borrow $100,000, $200,000, or whatever you need for the mortgage to buy Harlem condos, figure out whether you can really afford it. Just because the bank will loan it to you doesn't mean that you'll be able to pay it back -- at least, not without cutting into other goals that may be a priority for you. Are you planning to have a big family? Would you rather spend money on travel or spoiling the grandkids?
Remember, Harlem condos payments are just one piece of your financial puzzle. Carefully consider what you might need to give up to make that Harlem real estate house a reality, and ask yourself whether you're really willing to do it.
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