Posted by Frank Chin on September 15, 2003 at 10:47:37:
The difference is you have a deed for your condo, and you have ownership of common areas thru the HOA.
In a coop, you own shares for the building or complex, and your monthly charges may include an underlying mortgage. The loan you get is secured by shares of stock in the coop, and thus rates are higher compared to loans secured by RE.
The other difference is if the coop has too many owners with bad credit, the entire building can go into default. Problems had arisen where the developer or converter owned large blocks, and failed to pay its share of the common charges.
Here in NYC, you go thru an extensive interview when buying coops, and they want to make sure your credit is excellent. The other owners would have to pick up the tab if you fail to pay your share of common charges so they wn’t go into default, and have utilities cut off, and get foreclosed on the underlying mortgage.
There’s no such requirment as to condo’s.
The long and short of things is you’ll have less issues with condo’s if you have credit problems.