David owns a cooperative apartment in Manhattan and wants to refinance his existing share loan to take advantage of lower interest rates. What unique requirement might David face that condominium owners do not encounter?
Correct Answer
D) David must get cooperative board approval for the refinancing
Many cooperative corporations in New York require board approval for refinancing of share loans, even though the shareholder is not transferring ownership. This is because the refinancing may affect the cooperative's financial profile or the shareholder's financial stability, which the board has a legitimate interest in monitoring.
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Related Topics & Key Terms
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Related Concepts
A conventional loan is a mortgage that is not insured or guaranteed by a government agency such as the FHA, VA, or USDA. It is originated and funded by private lenders and may be conforming or non-conforming.
The debt-to-income ratio (DTI) compares a borrower's monthly debt obligations to their gross monthly income. It is used by lenders to determine how much mortgage a borrower can afford.
In the context of foreclosure, a deed transfers ownership of the foreclosed property to the new owner, typically the buyer at a foreclosure sale.
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