What is the difference between a Condominium and a Coop?

A coop apartment is different from a condo in a number of different ways. When you decide to buy a coop, you are buying stock within the corporation who owns the apartment building. Then, the building will lease the cooperative apartment to buyers under a long-term proprietary lease. Cooperative owners pay a monthly maintenance fee to the building corporation for items relating to the expense of operating and maintaining the building property, underlying mortgage and property taxes for the building.

When you purchase a condo, you are buying an individual piece of property such as a townhouse or a house. The building is divided into separate condominiums and a common area. The condominium owner owns its individual apartment as well as an undivided interest within the common area. They are also responsible for paying any real estate taxes and their share of the common charges for any expenses incurred for maintaining and operating the common areas. Unlike the cooperative building, there isn’t an underlying mortgage on the condominium building.

Most of the time, the condominium has a significantly higher value than the cooperative of the same size. A condominium buyer will incur additional closing costs for the mortgage recording taxes and title insurance. Depending on the cooperative building, the tax deductibility percentage for the monthly maintenance charges will vary according to the property in question.

If you are unsure which one is going to be the best for you, we at MortgageDepot can help answer any questions you may have about the different properties. You want to make sure you are stepping into something that is going to work the best for you and your individual wants and needs. Take some time to discuss the benefits of both properties with the real estate professional to make an informed decision.

Get in touch with one of our loan consultants for more information.