Expert: Hans Weber, Licensed Broker Associate - 8/2/2004

Question
Hi I would like to know what is the difference between owning or buying into a Co-op or a Condo and for a first time homebuyer, with not so good credit and not much in the way of down-payment, which is better to do?  Or for a first timer is going for a house more economical or a better idea?

Answer
Hi Shurba,

Thank you for your question.

Owning real estate is the American Dream.

Your first step should be to get a mortgage preapproval so you know what you can afford to spend.  This process will also uncover an credit problems that you have and you can then address them.

Then you can decide what to do next.  Houses and condos are more expensive to buy than coops, so a small down payment will make coops easier to try to buy.  Coops require board approval which means you get you bank mortgage then meet with the coop board to get their approval of you becoming an owner in their coop.  The boards usually scrutinize credit because they do not want owners who may not pay the maintenance charges.

Condos do not usually require board approval.  So, you only need to get the bank to approve your mortgage.  

The amount of downpayment required will depend on your credit, income.

So, start today and get preapproved.  My mortgage company can give you a head start for free over the phone if you wish: 888-421-3812.

Good luck.
Hans