Becoming a homeowner in Brooklyn Part 6
May 19, 2014
The path between our offer being accepted and closing.
In last weeks Monday blog I mentioned that we had a couple of bumps in our path to closing. I’ll talk about those now. Now we haven’t actually closed yet and hopefully I’ll have no more bumps to add to this list. We have an interview with the co-op board tomorrow and will hopefully close within the next two weeks. Fingers crossed.
There are so many things you can imagine going wrong before you actually own the home that you bid on. The main worry is the inspection, which went remarkably well in our case. No worries there. There were two main incidents that stopped my heart during this process. The first was that we learned the building was on a land lease only days before we were supposed to sign our sales contract. This was a term or idea that I hadn’t even heard of before. The building doesn’t own the land they are on and when the lease runs out they could potentially (although extremely rare) lose the right to their property? That’s nuts! The lease was set to run out in 2050. Okay so what does this mean to us? We won’t be there by then probably but will we be able to resell?? After a day and a half of feeling very panicky about this situation the fire was put out. My attorney did some research and learned that the building has an automatic renewal for 99 years once this lease is up. Phew. One crisis averted and one lesson learned.
The next had to do with the mortgage broker. We had found a broker at a reputable bank who quoted us a great interest rate of 4.18%. Too good to be true? Turns out it was. She had said that we’d be getting this rate through some loophole. She said we couldn’t get a regular rate b/c of the land lease issue but we could get a jumbo loan rate without actually getting a jumbo loan. Hmm. Well, we trusted the expert…until that expert screwed us over. Weeks had gone by and that rate wasn’t locked in but she had supposedly gone to her legal department and superiors to ask if it was definitely the rate we could get and told us that we could. We didn’t want to lock in too soon b/c we would have to pay extension fees for every day that our closing date went beyond the lock-in period (which is 60 days). Finally, though I wanted to lock in this rate. I called her twice and emailed once but didn’t hear back from her for two days. We had already scheduled and paid over $400 for the banks appraiser to come out. We were in a hurry to get everything done. Our broker finally called me back only hours after the appraiser had been to the apartment. She had “bad news”. She went on to tell me that she was wrong about the loophole and that she couldn’t give us that rate but could give us a rate of 4.65%. A huge difference! Over thirty years it would be thousands and thousands of dollars and her apology was so casual as if it was a difference of ten bucks! I was fuming and shocked. We pulled out immediately and tried to get our appraisal fee back but couldn’t. I’m still mad about this one but we ended up going to a different bank and getting a very good rate.
So, my advice and what we learned from all of this is to slow down, do your research and that you should lock down an interest rate before paying ANY fees. I’ll let you know how our interview went next Monday!