Buying a co-op is a unique experience, but don’t let the process overwhelm you. Here is a simple guide to helping get you into the co-op of your dreams.

Financial Review and Qualification: The first question a buyer asks is, “What can I afford?” We must look at your income, assets and current expenses to determine how much you can reasonably afford on your new apartment. This is also a good time for you to contact a lender and get pre-qualified.

Find the Right Apartment: Taking into account both your personal and financial requirements.

Offer and Acceptance: Buyer and seller agree upon a price. At this point you should retain an attorney if you haven’t already done so. Your attorney will review the financial statements, offering plan and amendments, as well as other documents relating to the co-op. In addition your attorney should review the contract before you sign anything.

Signing the Contract: At this time you will make your down payment. A typical down payment is ten percent of the purchase price.

Applying for a Mortgage: The lending institution will require a copy of the fully executed contract along with your completed application. The loan process will take two to four weeks to complete. Often you receive a commitment sooner than this, which will be subject to certain other conditions being met (satisfactory appraisal of the property is a normal condition).

Begin Work on Completing the Cooperative’s Purchase Application: Your goal should be to have your application completed and in good order by the time you receive the commitment letter from the bank.

Submit the Application to the Cooperative’s Managing Agent: We strongly recommend that you let us review a copy of the application once it is complete. This can help prevent problems or unnecessary delays. The entire package is then sent to the managing agent for their review. The agent will order a credit check and may also check references, etc. They will then forward your application to the cooperative’s board of directors for their review. An interview date is then set.

The Interview: The interview typically lasts about a half an hour. This is the time for the board members to ask you questions pertaining to your application.

Board Decision: Usually received within a day or two of the interview.

Closing Date: After an application is approved a closing date can be set. This averages a week to ten days after the interview. In order set a date a time must be coordinated with the buyer and seller, their attorneys, the lending institutions and the managing agent.

Closing: Final transfer of the proprietary lease, stock certificate and keys to the buyer. Balance of funds owed is paid to the seller.

The total process will take about three months from start to finish. If no financing is required then the process is slightly quicker.

-Courtesy, New Heights Realty

A recent news report said that given today’s uncertain economy “720″ is the new magic number when it comes to scoring one’s credit. But what is a credit score?

Often the terms “credit score” and “FICO score”are used interchangeably. They both give creditors the same number when it comes to determining whether or not they will grant an individual credit or not and at what interest rate.

Established in the 1960′s, Fair Isaac Company or FICO, is a credit-reporting agency that assigns a score between 300-850. The better your credit, the higher the number. Having a high credit score does have its advantages, including lower interest rates on loans. On the flip side if you have a low score you may end up paying higher interest rates or having your request for a loan turned down.

There are several factors that determine your FICO score, the top 5 are:

• Payment history on previous and current debt makes up 35% of the score.
• The amount owed to current creditors accounts for 30% of the score.
• The length of your credit history counts 15%.
• New credit will also affect the score and accounts for 10%.
• The type of credit you have accounts for 10% of the score.

As you can see the most important is payment history. By making your payments on time while avoiding hefty outstanding balances you can influence your score automatically. The good thing is, if you have had issues in the past and your credit is less than perfect you can fix it. Fixing your credit and improving your score does take some time but in the long run it is worth it, especially if you plan to make a large purchase such as a home purchase where you will require a large loan.

Improve your score by fixing any errors on your credit report and share information with FICO to help keep your credit histories updated. If you are planning to buy a home, pull your credit report before applying for the loan so you can make sure there are no discrepancies that need to be addressed. Having a high score can save you thousands of dollars in interest payments and could mean the difference between approval or rejection.
-Source: RealEstatePro