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Co-Op Mortgage Loans

What is a co-op?

In essence, a co-op is one or more residential buildings, typically owned by a corporation. Residents of a co-op purchase shares in the building. The larger the living space, the more shares are required to be purchased. Therefore, each shareholder in a co-op does not actually own real estate, but rather shares of the corporation that does own the real estate.

Traditionally, if you wanted to buy into a cooperative apartment building, you'd have to pay the price with a higher rate on your co-op mortgage. However, there are a growing number of lenders who are challenging the need for such high premiums on coop loans -- Total Mortgage Services is one such lender.

What Are Some of the Conventional Objections Lenders Have to Co-op Mortgages?

The main reason that some lenders charge premiums on co-op mortgages is because of the perceived high-risk of default. Most cooperative buildings have mortgages on the building itself, and pay off the mortgage through monthly maintenance payments from the unit owners. Therefore, some lenders view co-op mortgages as fundamentally providing a second mortgage. In the event of foreclosure, the second mortgage would take second position behind the main building's co-op mortgage, increasing the risk of not recovering the invested funds.

The other common objection has to do with the structure of a cooperative building. Where condominium owners actually own the property that they purchase, cooperative apartment owners only hold shares in the corporation that owns the building, as previously mentioned. This can limit the pool of investors that can invest in cooperative buildings.

Lastly, the Federal Housing Administration, or the Veterans Administration cannot guarantee co-op mortgages. For some lenders this automatically removes the incentive to offer competitive rates on co-op mortgages.

How are Co-op Mortgages from Total Mortgage Different?

At Total Mortgage, our aim is to give our customers some of America's lowest rates on their mortgages. This rule applies to all of our loan products -- from conventional mortgages, to super jumbo mortgages, to co-op mortgages.

One of the reasons why we can offer such great rates on co-op mortgages is because we have an expert team of in-house underwriters. The ability to underwrite our own loans means that we are much more flexible than other lenders who rely on outsourced underwriting. This flexibility means that customers are treated as individuals, and each mortgage is tailored to their personal financial needs.

Ready to talk to the Coop Mortgage experts and get some of America's lowest rates on your Co-op loan?

Call Total Mortgage today at 877-868-2503. We look for to the opportunity to earn your business!

Call a Total Mortgage expert now at 877-868-2503 to find out how we can customize a mortgage loan with some of the lowest current mortgage rates for you.

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