what is typical DTI % requirements by boards? Is it under 30% for most buildings in the nyc metro area? Is DTI in the 30 - 50% not likely to get approved by a board/building with good finances? Some outer borough coop are marketed as only 5-15% down (I have 20% down though) but will the boards likely be picky about debt to income ratio and employment history with such relaxed down payment... [more]
what is typical DTI % requirements by boards? Is it under 30% for most buildings in the nyc metro area? Is DTI in the 30 - 50% not likely to get approved by a board/building with good finances? Some outer borough coop are marketed as only 5-15% down (I have 20% down though) but will the boards likely be picky about debt to income ratio and employment history with such relaxed down payment requirements (or are these likely poorly managed/broke coops)?
I'm unsure I'll pass most board approvals due to student debt. I'm wondering if I should just try to land a sponsor unit. Seems like lenders are willing to lend in 30-45% dti debt to income range but I don't think a coop will let the same DTI ratio fly.
Even with 20% down and lender approval I don't think I'll pass most board approvals with a DTI above 30% and limited working experience (about 1yr employed full time in my field but prior to was in masters program in school barely making pennies part time). I'm afraid of waiting for the typical 2-3 yr employment history. I'm living at home and saving as much as I can for a down payment but watching low end/ entry prices soar. I'm willing to try and buy because the studio/ 1 bd market is growing much faster than my salary. I might save and work hard for another 1-3 years and still end up in a studio somewhere in an extreme outer borough that's far from transit, undesirable etc.
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Response by dan@digsrealtynyc.com
over 8 years ago
Posts: 114
Member since: May 2012
Most co-op boards claim to not have rigid financial requirements and take a holistic approach to evaluating applicants. In Manhattan, brokers and sellers will look for candidates with a post-closing DTI under 25% and liquidity in excess of 24 months of your fixed liabilities, including student debt payments. It is often more relaxed in the outer boroughs, but a 30% DTI will likely still be deemed necessary to get an offer accepted. That being said, if your entire financial profile looks attractive (for example, if you have high assets and liquidity with your higher DTI), that might be enough. Each building is different and you should discuss the best way to present yourself in an offer with your agent.
When a borrower has student loan debt, the underwriting requirements change especially if you have a deferred payment plan. No longer will a lender not count future payments in calculating DTI, and I am certain a board will follow the same reasoning in their DTI calculation. Even some sponsor apartments have income requirements.
That said I have a lender who will do an income analysis for a borrower before he even has identified a property to buy. They do not charge for this and you are not obligated to use this lender. This is the same underwriting process as if you were applying for a mortgage. When you do enter into a contract, the loan process is so much faster. And this lender is just as good as Wells Fargo if not better in rates as well as efficiency. I think it was you Dan from Digs Realty that I got a mortgage for your client last December in record time. He was turned down by Wells Fargo. An income analysis is also far better then a pre approval.
In so far as your work experience the fact that you were working albeit part time in the same field is a plus with many lenders as I am certain many co-op boards wil view it in this light.
Feel free to contact me,
Ellen Silverman
E. S. Funding Co.
esfundingco@aol.com
Licensed Mortgage Broker since 1990,NMLS#60631 since 1990
Licensed Real Estate Broker since 1987
212-786-9682
Feel free to contact me
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Response by Elleinad85
over 8 years ago
Posts: 114
Member since: Jul 2011
I created a great presentation for first time homebuyers with student debt that I presented to the CommonBond (student loan refinancing) community. https://www.periscope.tv/CommonBond/1BdGYNyVjzyJX
I can send you the powerpoint at Danielle.Nazinitsky@corcoran.com.
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Response by front_porch
over 8 years ago
Posts: 5312
Member since: Mar 2008
From a board's POV, there is a giant difference between 32% and 36%. It's going to come down to a lot of other subtleties too -- did you go to a school that is Tri-State, or at least well-respected on the East Coast? Is your master's specialty something it sounds like there will be long-term demand for in the future? How strong are your rec letters going to be?
I'm happy to talk to you about some of these specifics offline a little too -- my plate is too full for new buyer clients, but I can probably give you an idea of the shape of the elephant.
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Most co-op boards claim to not have rigid financial requirements and take a holistic approach to evaluating applicants. In Manhattan, brokers and sellers will look for candidates with a post-closing DTI under 25% and liquidity in excess of 24 months of your fixed liabilities, including student debt payments. It is often more relaxed in the outer boroughs, but a 30% DTI will likely still be deemed necessary to get an offer accepted. That being said, if your entire financial profile looks attractive (for example, if you have high assets and liquidity with your higher DTI), that might be enough. Each building is different and you should discuss the best way to present yourself in an offer with your agent.
Dan Gotlieb
Digs Realty Group
https://digsrealtynyc.com/
When a borrower has student loan debt, the underwriting requirements change especially if you have a deferred payment plan. No longer will a lender not count future payments in calculating DTI, and I am certain a board will follow the same reasoning in their DTI calculation. Even some sponsor apartments have income requirements.
That said I have a lender who will do an income analysis for a borrower before he even has identified a property to buy. They do not charge for this and you are not obligated to use this lender. This is the same underwriting process as if you were applying for a mortgage. When you do enter into a contract, the loan process is so much faster. And this lender is just as good as Wells Fargo if not better in rates as well as efficiency. I think it was you Dan from Digs Realty that I got a mortgage for your client last December in record time. He was turned down by Wells Fargo. An income analysis is also far better then a pre approval.
In so far as your work experience the fact that you were working albeit part time in the same field is a plus with many lenders as I am certain many co-op boards wil view it in this light.
Feel free to contact me,
Ellen Silverman
E. S. Funding Co.
esfundingco@aol.com
Licensed Mortgage Broker since 1990,NMLS#60631 since 1990
Licensed Real Estate Broker since 1987
212-786-9682
Feel free to contact me
I created a great presentation for first time homebuyers with student debt that I presented to the CommonBond (student loan refinancing) community. https://www.periscope.tv/CommonBond/1BdGYNyVjzyJX
I can send you the powerpoint at Danielle.Nazinitsky@corcoran.com.
From a board's POV, there is a giant difference between 32% and 36%. It's going to come down to a lot of other subtleties too -- did you go to a school that is Tri-State, or at least well-respected on the East Coast? Is your master's specialty something it sounds like there will be long-term demand for in the future? How strong are your rec letters going to be?
I'm happy to talk to you about some of these specifics offline a little too -- my plate is too full for new buyer clients, but I can probably give you an idea of the shape of the elephant.
ali r.