A question that often comes up for first-time buyers in New York City is whether they are able to co-purchase with their parents. The answer is yes! It is possible to buy an apartment together with parents. First-time buyers often have the income they need to pay for their monthly mortgage, common charges and taxes, but the hardest part is accumulating the cash for a down payment.
Read More: Buying an Apartment with Less than 20% Down
So what types of apartments can you co-purchase with parents?
Co-ops have much stricter guidelines than condos, so the rules on buying together with parents is going to be much tougher. However, there are many co-ops that are looking forward to having a diverse mix of buyers with different financial situations, so they are open to co-purchasing. One of the benefits of co-ops over condos is that they often have lower price points, which makes them more accessible to first-time buyers. Since condos are much looser in terms of restrictions, co-purchasing becomes much easier.
Why is co-purchasing beneficial?
Maybe you don't have the down payment available, the necessary required income to carry the mortgage (from a bank's perspective), or the credit to buy the apartment on your own. Maybe your parents promised that once you get a steady job, they would help you out with your first apartment. Maybe your parents want to jumpstart your ascent up the property ladder and help you out. Whatever the reason, there are many benefits to co-purchasing which make it possible for you to buy your first apartment.
What does co-purchasing look like in practice?
Co-purchasing can take many forms. For instance, perhaps your parents give you the down payment in its entirety and you take care of monthly payments. Maybe your parents are only giving you half of the down payment, and you still take care of the monthlies. In some cases, parents may even help with the monthly payments.
In some instances parents may be included on the deed, while in some scenarios they prefer not to be. The parents may be included on the mortgage, or if they're not helping with the monthlies or signing on as a guarantor, they may be excluded from the mortgage but included on the deed. Every situation is different and requires a conversation with your real estate agent, parents and lender.
Can parents gift money for the down payment?
Absolutely, assuming the building allows for it. If a parent is gifting the down payment or even lending it, they don't necessarily have to be on the deed or mortgage. However, if their financial credentials will be used to give the bank and building confidence of financial sustainability, they may be included on the aforementioned.
Want to learn more?
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