Financial Qualifications for Buyers
Manhattan is comprised of many different types of buildings with Board requirements varying as well. Some very conservative buildings prefer applicants to use a much smaller percentage of their income for debt and maintenance (Approximately 15%) to other buildings requiring no more than 25-30% of their Gross Income for debt service and maintenance.
Sale Price =$800,000
Maintenance = $950/mo
30% of 200k =$60,000
Annual Debt = $3500 + $950 = $4450*12 = $53,000 (which is less than $60,000 or 30% of Income)
Note: Some buildings do not consider commission or bonuses as reliable income. In evaluating “commission only” applicants, banks and coop boards will take the average of two or three years’ earnings as their guide. If an applicant’s income is lower than required, he or she should consider obtaining a guarantor, a co-applicant, or a smaller mortgage.
Liquidity consists of cash and assets which can be converted to cash within 90 days.
Stocks, Bonds, Treasury Bills & Notes, IRA Accounts, KEOGH Accounts, SEPs, Annuities, Cash Value of Life Insurance, etc
Very conservative buildings may require liquid assets of two to three times the cost of the apartment while other buildings may expect one to three years of maintenance and mortgage liquid post closing..