Maria is purchasing a cooperative apartment in Manhattan for $650,000. She has been pre-approved for financing. What type of loan will Maria most likely need to secure for this purchase?
Correct Answer
B) A share loan secured by the cooperative shares and proprietary lease
In New York, cooperative apartments involve purchasing shares in the cooperative corporation plus a proprietary lease, which is personal property, not real property. Therefore, buyers need a share loan (also called a co-op loan) that is secured by the shares and proprietary lease, not a traditional mortgage.
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Related Topics & Key Terms
Key Terms:
Related Concepts
Foreclosure is the legal process by which a lender takes possession of a property when a borrower fails to make mortgage payments. It allows the lender to sell the property to recover the outstanding debt.
The loan-to-value ratio (LTV) is the percentage of a property's appraised value or purchase price (whichever is lower) that is being financed through a mortgage. LTV = Loan Amount / Property Value.
A comparison of the major mortgage loan types—conventional, FHA, VA, and USDA—covering their eligibility requirements, down payment amounts, mortgage insurance rules, and best use cases.
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