How much cash you need to buy a co-op apartment in New York City depends on your co-op building's down payment and post-closing liquidity requirements.
You need to have 21% to 22% of the purchase price in cash to buy a co-op in NYC, assuming 20% down.
This excludes any post-closing liquidity requirements by your lender and the co-op.
Buyer closing costs for co-op apartments in NYC are between 1% to 2% of the purchase price,
and most co-ops have a minimum down payment requirement of 20%.
The typical post-closing liquidity requirement for co-op buildings in NYC is between one to two years of housing expenses.
However, the specific types of assets which qualify for post-closing liquidity and how heavily they are weighted varies by co-op.
How Much down Payment Is Required for a Co-op in NYC?
The vast majority of co-op apartment buildings in NYC require at least 20% down.
Even if a co-op building does not have a stated minimum down payment requirement,
an offer to purchase with less than 20% down is usually frowned upon by sellers and co-op boards.
Co-ops have discretion in whether or not to approve a prospective purchaser, so the overall strength of a buyer's offer is an important consideration.
A co-op board may reject a deal if they feel that the purchase price is too low or the buyer isn't putting enough down on the purchase.
If a co-op board likes a candidate but they have financial concerns after reviewing the board application,
the board could ask the purchaser to put down more money or leave some amount of monthly maintenance in an escrow account.
However, there is no guarantee that a co-op board will offer an applicant a pathway towards board approval versus rejecting her or him outright.
How Much Are Co-op Buyer Closing Costs in NYC?
Co-op buyer closing costs are between 1% to 2% of the purchase price.
The largest co-op buyer closing cost is the Mansion Tax of 1% which applies to purchases where the total consideration is $1 million or more.
Aside from the mansion tax, co-op buyer closing costs in NYC consist of co-op building fees,
your real estate attorney's fee and bank fees such as the application and appraisal fees.
Buyer closing costs for co-op apartments in NYC are actually quite low compared to what you'd pay when buying a condo in New York City.
This is especially true if you're taking out a mortgage since the Mortgage Recording Tax does not apply to co-op apartments.
How Is Post Closing Liquidity Calculated for a Co-op?
Post-closing liquidity is a measure of how much in liquid assets you have after closing on your co-op, factoring in your down payment and closing costs.
Although most lenders require at least 6 months of post closing liquidity, co-ops typically have much stricter guidelines.
Most co-op buildings in NYC are looking for one to two years of post-closing liquidity.
Some co-ops do not spell out an exact requirement for post-closing liquidity.
In such a scenario, the co-op will look holistically at your overall financials and evaluate factors such as the consistency of your income,
your debt-to-income ratio and the type of assets you hold.
Do Co-ops in NYC Allow Gifting?
Sometimes. Gifting is on a case-by-case basis for co-op buildings in NYC.
With that said, most reasonable co-ops are open to gifts because they expand the potential buyer base and therefore strengthen property values in the building.
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