Mortgage is today one of the most recommended and certainly one of the best known credit products in our market. So it is clear that people take it mainly to finance the purchase of a house or apartment , as well as the construction of real estate.
But it is good to know that there is also a product, which is a mortgage for a cooperative apartment. As the name itself suggests, it may be related to two main options. And these include:
- Purchase of a share in a housing cooperative
- Purchase of a cooperative apartment
Although it is a classic product with several specific elements, it should be noted that it may also have its risks. Let’s see them.
Mortgage for a cooperative apartment may have a liability problem
The first problem may be the situation associated with the guarantee itself. It must be said that this is when we are buying a particular stake in a given cooperative. Whether or not a given share can be guaranteed is decided mainly by the team and how it is divided .
If the whole cooperative house is divided into individual apartments, which are related to the shares, then this is not a problem. But if there is a situation where it is not so divided, it is a big problem and it is necessary to think that you will have to secure another property , which the mortgage for a cooperative apartment will be guaranteed .
However, even if liability is possible, there is also an additional risk to the team members. To be able to realize the guarantee of the apartment, it is necessary that the cooperative members agree to sign a security agreement . If this does not vote at the meeting, you are unlucky.
Watch out for the amount you get
With a classic mortgage, we often find that we can easily get an amount that covers the 100% purchase price of the property. If you ask the same for a mortgage for a cooperative apartment, it can be a problem .
Not all mortgage banks offer such a financing option. It should therefore be taken into account that the maximum amounts are around seventy percent of the estimated value. So you have to get the rest of your money from your sources. This is also a negative that a mortgage for a cooperative apartment can bring.
Also be aware of the conditions of acquisition
Your earnings are important. Even if you guarantee the property and the bank can cover its value quite well, it does not mean that it will not want to examine you . If we look at the main condition, it is definitely a necessity of regular and sufficient income. For example, Good Finance states: “ It’s simple. We will help you not to waste your time and money. We take into account income for the last 3 months, for entrepreneurs for 6 months. ”
Another problem may also be the speed of handling . Keep in mind that even if your bank boasts just a few days, it means the time runs from the moment you deliver all the necessary documents. Especially if you need documents from the team itself, you can expect that it will not take less than a few weeks.