The Market

The top hurdles to getting a mortgage—and how to overcome them

By Jennifer Laing  | September 18, 2014 - 3:59PM

In Case You Missed It: Every so often, BrickUnderground digs through the archives to find the best advice our experts have shared through the years.

New York City apartments are expensive and buying one likely involves the obtaining of a mortgage. Here, the most common mortgage-related snafus and how to avoid them:

Fluctuating income: The self-employed or those with irregular incomes can appear as unpredictable borrowers to a bank. To present yourself in the best way possible, have at least two years of tax returns on hand and documentation of estimated taxes paid. Record all your earnings—even those in cash. Finally, offer at least a 25 percent down payment. It will reduce your debt burden and ensure the lowest mortgage rate possible.

Poor credit: You need a stellar credit score—something north of 700 (or even 720) to qualify for a loan. If you don’t, contact one or all three credit agencies—Equifax, Experian and TransUnion—to find out where you stand and if there are any discrepancies that can be fixed. Then, build up your credit by obtaining a secured credit card (and pay the bills on time).

A low appraisal: An appraisal that comes in lower than expected tells the lender the place you want to buy is not worth as much as you’re paying for it. What to do? First, try to renegotiate the price with the seller. Next, try to appeal the appraisal or have the property reappraised. Finally, if possible, put more money down to reduce the amount you’re looking to borrow. If all else fails and you have to walk away, keep on eye on the property in case the sellers decide to lower the price.

A failing grade for the building: Condo buildings where less than 51 percent of the apartment owners actually live in their units and co-ops without enough cash flow may be a red flag to lenders. In this case, consider going to a direct lender, rather than a retail bank, since their requirements are often more flexible.


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