Q & A with Dottie Herman

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Q1 - Do you need to have an inspection of a NYC apartment before purchase the same way you do to a house?

A - Many buyers, to satisfy their need for a comfort level, hire an Engineer to inspect both the apartment and the apartment building, prior to purchase. If you purchase a coop apartment, the apartment is usually sold "as is." The coop has certain infra-structural responsibilities which are outlined in the Offering Plan and Proprietary Lease. The purchase of a condominium, also usually sold "as is", is most similar to purchasing a house, but the Condo Association responsibilities should be reviewed.

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Q2 - How do I go about getting a reverse mortgage for my parents? Are there pros and cons?

A - First, adult children should always consult with their parents before making financial decisions for them, unless their parents are physically and/or mentally unable to be involved. If you are the authorized legal representative for your aging parents, you can request a reverse mortgage counseling session. Counseling allows you to take a look at your parents' overall finances to decide whether a reverse mortgage is a smart option. Basically, with a reverse mortgage the bank pays them versus them paying the bank. They make no payments on the loan until they pass away and the home goes to their estate, or they permanently move from the home. At that time, you would refinance or sell the home to pay off the balance.
Many of the larger lenders have discontinued their Reverse Mortgage programs.  You should contact your local lender(s) to see who is offering the program, and make an appointment to meet with a Reverse Mortgage Specialist.  If you qualify, there are a few "pros", such as not having to make any more mortgage payments, actually "receiving" monthly payments from the bank, and not having to worry about foreclosure, to name a few.  The main "con" would be leaving your heirs with a property that has less equity and a property that would either have to be refinanced, or sold within the year following your death.  Take a look at the AARP website for more in-depth information.  Good Luck!

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Q3 - I am thinking of purchasing a property and I want to have all of my financials in order. What will I need to provide to the banks in order to get a loan?

A - You will most likely need to provide your most recent months' pay-stubs, last 2 years of W-2's for all jobs, your last 2 years of 1040 Tax Returns (with all schedules), your last 3 months of bank statements (all pages), documenting the source of funds for the down payment and closing costs, and your last quarterly retirement account statements.

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Q4 - I just got approved for a mortgage; however, someone just told me that the bank is going to ask for my credit score and financials again before we close. Is this true?

A - This could be true if the loan approval process takes more than 120 days, at which time your credit report will expire.  The bank will run a new credit report, which may have a different credit score from the first one. They will also ask you for updated pay-stubs and bank statements.

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If you have a real estate question for Dottie, please send it to; Reporters@WorldPropertyChannel.com

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