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Mortgage lenders that will lend to non-occupants and occupants?
I have a question about home loans and any banks/credit unions who will lend to both non-occupants and occupants.
Here's my situation: My family is looking to buy an apt/condo/house in NYC, specifically Brooklyn. The original plan was for me, my sister, and my dad to co-borrow a loan and split the mortgage between the three of us (only my sister and I will be living in the place). Apparently sellers in NYC strongly prefer that we have a local lender (my parents live in San Francisco) so we applied for a pre-approval through Chase. Our Chase mortgage broker said that he will lend only to the people who will be occupying the apartment, which means that between me and my sister, we can afford a place that's only a fraction of what we originally thought we could afford. I asked him of this was a Chase specific policy or if it was standard, and he said it was standard practice.
My question is: is there ANY lender out there in NYC who'd be able to lend a loan to the three of us? Even though one will not be an occupant? Another thing to consider is that the place we're interested in buying is a co-op, and apparently some lenders don't finance those. I'm overwhelmed by the amount of information there is out there, so I would appreciate any kind of help and advice! Thanks everyone!
Re: Mortgage lenders that will lend to non-occupants and occupants?
Maybe it is a NYC thing, but a lot of what you describe sounds bizarre. People buy homes all the time that they are not going to live in. Either as an investment property or, like yourselves, to help their children out. It can make things a bit harder, sure, but it is not unusual.
I would definitely not take Chase at face value saying this is a "standard practice". Banks and mortgage lenders vary widely in what they will/won't do. I would definitely talk to other banks and/or mortgage lenders. And, unfortunately, it is possible you might find yourself having to go with a lender who is not local.
I'm also surprised that sellers in NYC strongly prefer a local lender. Granted, I have never lived in NYC, so maybe it is a big deal. But I know when I bought a home, no one cared where I had my financing. Just that I had financing lined up. And I would feel the same way if I were selling my home. With that said, is Brooklyn a hot market right now? If not, than you might find a lot of sellers who...even if they prefer local lender...aren't going to turn down a good deal just because the loan is not through a local bank.
Good luck! Dealing with banks and their craziness is one of the WORST parts of the home buying process. For example, the home I bought is a duplex. And even though I qualified for DOUBLE the price of the house...without taking potential rental income into consideration...I definitely faced extra challenges on the financing end because it was not a single family home. I was like, "So, if we pretended the house didn't have two front doors, my loan would be no problem at all...but because it does...I have to jump through all these extra hoops." To me, it was just totally bizarre.