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Loan to value on new development
Started by sohoman
about 10 years ago
Posts: 76
Member since: Mar 2013
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Posts like these make me feel like I live on west 67th street.
If the market goes up, the max loan you'll be able to get will be based on the contract price. If the market goes down, the max loan you'll be able to get will be based on the appraisal, which is done at the time when the unit is habitable.
Dan Gotlieb
Digs Realty Group
www.digsrealtynyc.com
After the financial crisis a few banks canceled their loan commitments for some new developments. The buyers lost their 10 percent deposit.
Ellen Silverman
E. S. Funding Co.
Ellen, which new developments?
which banks ?
This was news over four years ago. I don't remember the names of the developments. But I do remember that Chase was mentioned as a bank that canceled some commitments. I remember an article spoke to the issue of suing since people lost their 10% deposits. This was big news then. But there are other instances of a bank canceling a commitment. A few years ago I did a refinance for a woman who went to contract to buy in a building across from where I live in BPC. She had a commitment from a major bank. A day before she was supposed to close on the apt. the bank cancelled the loan. The building was un warrantable, but apparently this was an oversight of the underwriters and the woman had to come up with 650K the next day or forfeit her deposit.
Right now I would not consider putting a 10% down payment to buy in a new development that won't close for years.
Lending is still tight. I do not believe the economy is doing well. Janet Yellen just may raise rates next month which in my opinion would be a mistake.
We are able to use the new value in certain cases that there is clearly evident increases in value. This was the case on 150 Charles Street, since the contract prices were at $2200 per foot and they are now approaching $4000.
James McPartland
Assistant Vice President
Citizens Bank
NMLS ID: 614743
340 Madison Avenue
22nd Floor/ 22B103
New York, NY 10173
Office: 212-699-2908
Mobile: 917-993-2358
Email: james.mcpartland@citizensbank.com