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Buying a Home with Letters of Recommendation
by Jonathan Haeber
CMR Columnist
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Welcome back to your senior year of high school. You remember the painful process--SAT scores, financial information, and of course, letters of recommendation. You thought it was the last time you had to go through the gauntlet. Well, think again. Taking out a mortgage loan and buying a co-op is a lot like applying for college.
Getting Into a Co-op and Getting a Co-op Mortgage
Granted, most mortgage brokers won't request a letter of recommendation. However, if you're looking in a city for a good home in an exclusive part of town, you just might end up looking at a co-op. A co-op is a lot like a condo, except homeowners each own a common share of stock in the building, rather than actually owning a deed for the home.
Co-ops have the air of being more exclusive, with strict guidelines for buyers. Some of them require letters of recommendation--anywhere from three to six. If you're seriously considering a co-op, heed the warning of a board member who reads letters, "The last thing you want in a package is four letters, each of which is two-sentence paragraphs." Forget having bad credit, mortgage loans in default, or landlords who didn't take too kindly to you; co-ops are the schoolmarms of the real estate world.
What Co-ops Look for in a Letter of Recommendation
We've gone over the strict nature of getting accepted into a co-op, but what kind of letters are they looking for? According to Judith H. Saunders, of Halstead Property, board members are on the lookout for "people who have a solid base in society in terms of relationships. . . They [should] show that you get along with people."
While it's prudent to include at least one letter describing the finance-worthiness of the applicant (from past mortgage brokers, for example), it is no substitute for a well-thought out, personal letter describing your character and personality.
Source
New York Times: Mightier than the Board
About the Author
Jonathan Haeber is a marketing writer for Discovery Channel Stores. He recently purchased his first home, and took a self-taught crash course in home mortgages.
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