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If I were buying an apartment for the long term, I would like to see minimal increases in the maintenance from year to year and a possible reduction when the mortgage is paid off. As I indicated in another response, my coop is paying 33% of the budget, about $300k, in mortgage principal and interest per year, my share is almost $4000, which is covered by my maintenance. Underlying mortgage was refinanced, on track to be paid off in 2020. At that point, I could have a $325 per month (from $850) cut in maintenance without diminishing building services. One of my children was looking at purchasing in another building, they have 20 years to go on a 30 year self amortizing mortgage at 8% interest with a $5 million dollar mortgage. They should definitely look into refinancing while rates are still low, they would save lots of $$ over the next 20 years.
Join the Conversation Comments (1)We originally had a 5 year interest only mortgage. We did a refi with National COOP BANK (NCB) for a 20 year amortization schedule but for a 15 year term, leaving a balloon at the end. We did another refi when rates were low, which incurred a prepayment penalty, plus we added more $$ for needed improvements, which was rolled into a new 10 year fully amortized mortgage for the same monthly payments as before due to the reduced interest rates. Payoff is Dec 2020. In my child's situation, I never progressed to get to speak to a board rep. or get all the details on the underlying mortgage.
I'm jealous! :-) Congratulations on your Co-op's good fiscal management.
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JG - What kind of mortgage does your building have, self-amortizing or interest only? If its the self-amortizing kind that will be paid off in 4 years, then you are very lucky indeed!
As for the building your child is looking to buy into with the 8% self-amortizing, unfortunately refinancing is probably not an option. As I recently found out, commercial self-amortizing mortgages are very different from private self-amortizing in that they carry egregious pre-payment penalties which make refinancing virtually impossible except during the last few year.
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