Browsing Manhattan apartment listings is easy, but buying a Manhattan apartment is -- understandably, reasonably, and inevitably -- a much more complicated enterprise. There are many reasons for this, but the simplest and most obvious would be that, while it's free to browse NYC condos at New Construction Manhattan, it costs significantly more to actually buy an apartment in Manhattan.
It's an oversimplification, of course, but if the inflation of the devastating Bush-era housing bubble owed largely to the process of securing a mortgage becoming criminally, carelessly easy, then it makes sense that a new spate of regulations have made getting a mortgage notably more difficult than it has been in recent years. That doesn't mean it's not worth it, of course -- Manhattan apartments are great investments, and they're pretty nice places to live, to boot. But it does mean that home-buyers gearing up to purchase a Manhattan apartment need to be prepared for a much more rigorous mortgage-vetting than in years past. Like the medical procedure in the headline -- borrowed from The Real Deal, with some regret -- it's all for the best of reasons. But, again like the aforementioned medical procedure, it may not be much fun. As is usually the case with matters involving mortgages, real estate taxes and things of that nature, this sort of thing resists a simple, bloggy overview. The longish/complicated-ish story short is that those looking into buying a Manhattan apartment should be prepared for a more invasive and specific examination of their credit histories.
The more specific version is explained well by Ken Harney in The Real Deal. "As of Feb. 1, Freddie Mac began requiring lenders to dig back 120 days into your credit bureau files to detect any 'inquiries' -- signs of your applying for credit anywhere else -- and then to check out whether any applications were approved. If they resulted in significant new debts, your mortgage deal could be affected, and your lender might have to revise the terms or the rate you're being offered," Harney writes. "Meanwhile, Fannie Mae is requiring lenders to track or review your credit behavior after you've been approved for a mortgage but haven't yet gone to closing. That period often extends for 60 days or more. If inquiries pop up on your files during this time, lenders must check them out to determine whether any new debt might require a re-underwriting of the originally quoted terms." The whole thing is worth a read, and certainly worth taking into consideration once you're ready to move from browsing NYC condos to making an offer. Our Buyer's Resources will help a lot, and the real estate agents to whom all New Construction Manever hurts to know more yourself, of course. And check back later this week for more on another new bit of regulation that could make an impact on the NYC condominium market -- the flip tax.