Thursday, January 31, 2008

Lien on me

Today our attorney is doing a ‘lien search.’

Lien Search
It’s a search to make sure there are no liens filed against the stock so when you take title there aren’t any judgments unpaid which would transfer to you.

Basically, you don’t do this, then you could find out later you have to pay someone else’s debts. My thinking is that no mortgage company will give you a loan without one being conducted, and no lawyer worth his salt would let a deal go down without one, but it’s still good to know what the hell it is (I certainly didn’t).

Monday, January 28, 2008

and we're off! (we hope)

Last night we put the finishing touches on our co-op application package. (See pictures). You can get an idea of all the crap that goes into. I’I've been incredibly anal in trying to keep organized (probably making the broker’s life a lot easier than necessary).

It’s kind of an odd feeling to see your entire financial life put into two giant binders. But I also have learned the value of being organized and just keeping stuff in binders as they come in. Although, now I think we are going to be digital with everything, and only print when necessary. It’ll save physical space and be good for the environment. That is unless of course Tyler Durton does one of those things where he takes out everyone’s credit histories and all the banks, in which case it won’t really matter anyway, since we’ll have this abominably huge book of our financial life.

Now we pass this thing off to our broker and he gets to have fun and go through it all to make sure we have everything. Then he shows it to the seller’s broker, and if they agree everything is there, they go ahead and make 5 copies for the board. Then they submit that plus $1,000 of our hard earned money (which we hear we might get back) and soon we’ll have our co-op interview.

Because I’m a dork, here’s a video.

Thursday, January 24, 2008


So the phone rings today and it’s a 718 number. I think maybe it’s my broker, or perhaps even someone from the new co-op. I get excited. But it’s actually a different broker. The one who we were working with the time we almost bought the condo. The one I’m convinced tried to play us against the other buyers to drive up the price. I decided not to use her again because I felt she was dishonest, but that’s not the point of this post.

She called to follow up and see if we were still looking and I thanked her and told her we had found a place. She asked me the address and I told her and she laughed and said that it was her building. I asked if she meant she sold a property there, she said no, she actually had lived there in the first apartment for 10 years. I was like, wha….

Tuesday, January 22, 2008

So close...

So Amanda and I are making significant gains on reaching everything for our closing. Maybe this part is boring, but words can’t express the pain in the ass it is to get all your shit together. I can’t say it again: Save all your bank statements and put them in a banner. Or better yet, go paperless. Most banks will reward you by letting you keep up to 7 years worth of statements on online so when the time comes you can print them and have them.

We are currently missing about 6 months of statements on about 6 accounts and the bank normally charges about $6 per statement (wait a sec, 6-6-6…buying an apartment is the work of the devil!), so when we went in yesterday to ask for those statements we tried to get them to either reduce the charge or waive it altogether. The verdict is out on that.

In the meantime, we got our W2s in order, figured out our assets/liabilities sheet, and even got our mortgage commitment letter. It’s a good time to buy an apartment in terms of mortgages, b/c with drop from 7.25 to 6.50; we are looking at savings of about $400-500 a month. Not bad at all.

Once we get the rest of the bank statements and I finish my OCD need to put everything in laminated bindered pages, we can meet with our broker and send things out. Then we will schedule the board meeting and arrange for a closing date.

As the date draws nearer for our exit from our current pad, the reality of moving starts to settle in more and more. It will definitely be weird to leave the place we’ve spent the past 3 years of our lives. We moved in, ‘in sin’ and then as an engaged couple and now married for the past 7 months (to the day). Lots has transpired here, so it’ll be bittersweet to leave. It’s odd that we’re now thinking about piece mealing our apartment, selling our blinds to one friend, trying to sell our TV to another. Amanda informed me the other day that certain paintings or pictures wouldn’t be making it to the new apartment, so in an attempt to bring Mr. T in pearls and Napoleon Dynamite to a new home, I’ve taken them to my office. It works anyhow, since the walls in my office are bare.

That is all for the moment. We’ve been wanting to venture down to Brooklyn more and stroll around but the subzero temperatures are keeping us indoors. Once it warms up, we’ll hit it up again.

Until then.

Friday, January 18, 2008

Closing when?

Despite all our efforts to get things in order as soona s possible, there have been tons of questions that we have not had answered regarding the co-op application. They’ve asked us for statements going back two years and what not for 401K, bank accounts, etc. and we keep needing clarification on things. It’s not that we can’t get them, it’s just that we need to know.

For us to get two year bank statements (how many twenty-somethings save their receipts?) we will have to order them from the bank. Guess how much they are per statement? $6. That adds up. Luckily we can get the past year on line, but still it gets to be much.

So we were a bit confused to get this email from our broker saying:

“Also, it may be that the ______ may be able to close earlier in the month of March so the sooner we get the Board package completed, the better.”

Huh? If we are looking to expedite this why is it taking so long to get answers from the sellers broker? I would think they’d respond asap to any questions we have.

I just find that funny. But not as funny as this.

Happy weekend everyone.

Thursday, January 17, 2008

ARMed (Mortgage types Explained)

We are getting down to the nitty gritty, getting everything in order to get everything in order to get this damn thing done.

One of the things still outstanding is the mortgage commitment letter. As I've stated before, getting this together is a project in itself, and we almost have everything except for one small detail, that being Amanda and I forgot to sign Page 1. that will happen tonight.

Last night as I read over the document I had noticed we were getting a 7 year ARM mortgage, which I was confused because I thought we'd go for a fixed. So i e-mailed my guy and asked him if he could explain the difference and why we would want over the other.

So i present to you what he told me, and in case you're wondering what type of loan you might want to get, here is what you need to consider going in:

1)How long you think you might live in your place (is it big enough that you would stay over 10 years and raise a family)?
2) Even if you don't think you'll live there for more than 5-7 years, do you think you might keep the property as an investment?

And here we go...

There are generally two types of loans. Fixed Rate, and an Adjustable Rate Mortgage, or (ARM), hence the title of this post.

1. A Fixed Rate Mortgage (FRM) has a rate and payment that will not change over the life (30 years) of the loan.

2. An Adjustable Rate Mortgage (ARM) has a fixed rate for a given period (3,5,7,or 10 years) and then adjusts within limits annually up or down based on Treasury Bill rates for the remainder of the term totaling 30 years.

3. The rate associated with a FRM is typically 0.5-0.75% higher than an ARM because the bank is guaranteeing the rate for a longer period and therefore assuming more risk and charges for that risk. (Imagine rates going astronomical and the bank is screwed because they can't adjust the rate).

The rule of thumb in deciding which way to go is to think about how long you will own the property. Assuming you will only live there between 5-10 years, you would be paying more over the life of your ownership with a FRM because you would really not be taking advantage of the benefit of the extended rate guarantee. If you expect to stay there more than 10 years then you should probably take the FRM.

Taking an FRM if you are going to stay less than 10 years, is sort of like buying more than you need, (and never using it). If you decide later that you want to stay longer, you can always refinance without penalty. Sometimes if the rate gets to a place that the banks are happy with, they may offer you a fixed rate later down the road.
For our purposes, we are going with the 7 year ARM. Basically, we spoke today and we realize that while we do want to have our children there and have them go to the school in the park slope school system, I can't imagine having w kids around the ages of 9 and say 6-7 all in our apartment. At some point in that time frame, we will probably look to move. (Look forward to

The next question is whether or not to opt for an Interest Only option. This is a variation on the ARM that permits you to pay only the interest with an option to make principal contributions whenever you wish.

The upside
: you control your cash flow better on a month to month basis and when you make any principal contribution, the loan will recast so that the interest charged in ensuing months will be calculated on the outstanding balance.

The downside: the rate is about 0.25% higher than a fully amortizing(Principal plus interest) loan, but the savings in interest based on the recast feature usually negates that.

A hugely positive thing about interest only loans: Your required monthly payments are lower and younger borrowers who are upwardly mobile (love that term) usually like the freedom of structuring their cash flow at the beginning of the loan and then make principal contributions as they acquire more liquidity. Win win.

OK, so what does it mean that we have a 7 year ARM?

It means that rate we lock in now is actually fixed for 7 years, and in the 8th year it adjusts annually based on the market differential from the initial rate. This way, if you don't plan on staying in your pad for more than 7 years, you most likely won't have to deal with this issue.

We asked our broker if he thought we should go for a 10 year ARM, and he told he didn't recommend because there isn't enough of a rate difference between that and the 30 yr fixed to be meaningful. If you're thinking about the 10 yr ARM then take the 30 yr fixed.

Finally, if you're wondering to yourself, 'well what if i stick around for more than 7 years, and my rate does change, how high or low can it go? The legal cap is 2% per year limited to a lifetime cap of 5% from the initial rate. So theoretically, if you start at a rate of 6% on a 7-year ARM, by year 10, it could go as high as 11%. can also factor in the amount you'll save during those first years against the increase. I know, it's kind of enough to make your head spin, but hopefully some of this makes sense. that that is done...all we gots to do is sign a piece of paper to get our mortgage commitment letter, then put the finishing touches on our application (still waiting on credit reports and some straggling W-2s, oh yeah plus we need to get them copies of ALL our bank statements from the PAST 2 YEARS, plus 6 months of 401Ks, this shit is ridiculous) and then we'll have a home soon.

FYI the average person in NYC lives in their initial home for about 5 years before upgrading or moving out of the city

Tuesday, January 15, 2008

New Look!

Figured it was time to change it up a bit. But don't worry. Mittfarbs ain't gone hollywood just yet.


No, not procrastinating what needs to get done for the co-op application, but actually just the real job I have. The one that pays me for a living.

Things are moving along well, although we’ve been having problems hearing from our broker the exact format in which we need to prepare our package for the board. I’ve gotten very organized and anal, purchasing a binder, and dividers and clear plastic folders to put everything in. this is great when you have all the different documents like your past lease, your pay stubs (which I scanned and printed so they look better and more organized and also are in a standard 8 ½ X 11 format) and tax returns.

Of course, one of the things we need for the co-op application is our mortgage commitment letter, and to get that, we need to provide our mortgage guy with most of the things that the co-op board needs too. This is good in a sense because if we get together most of the stuff we need for the mortgage, we can just keep it organized and have for the co-op application. It’s just annoying b/c we have to get everything together quickly.

The interesting and wonderful thing about the digital age is that we were able to get copies of almost everything we needed from our mortgage broker electronically. This includes a signed copy of the contract, 2 pay stubs (scanned), 2 years tax returns (sent electronically from accountants, although my accountant is retarded and despite telling me they have sent to me twice, still have yet to receive), and all our bank statements. This would be a logistical nightmare to get and have mailed to you, but thanks to the power of the Internet and the ability to make files into PDF format, it’s much easier.

As of now, I’m just waiting for my accountant to send my returns over, and then we can submit to get our loan commitment letter. The other good news is that rates are going down so we can hope to lock in a good rate soon.

Once we have the commitment letter, we can finish up our application package. Of course, we are still waiting on our credit reports. Funny quick story…they tell you that you will receive your credit report in a non-descript envelope and that you are not to rip it. I forgot and opened mine. Luckily, it was a note saying that I had already received my free report and would have to pay if I wanted to order ($10.20 in NY State). I then realized Amanda probably had the same thing too, so I ordered those. Would have been a bad surprise to send to board and then find out we didn’t have the report there.

That’s all for now.

Friday, January 11, 2008

Mo money to the man

This image is probably not appropriate since putting money into your home is never money down the drain (unless you make one of those toilet seats made out of coins and dollar bills in which case its not money down the drain so much as sitting on money or something) but I liked the image and thought it was good.

Today we wrote a check for the second 5% of our initial down payment. As we said before, because the sellers asked to delay the closing until April, our lawyer worked it out that we gave 5% at the initial signing and 5% now so that we could keep our money in the bank just a little bit longer. Smart guy. So the second big check went out today and well, it's for a good cause, but DAMN that's a lot of dough.

We're getting closer to moving out, realizing day by day (by day) that soon we will have to say goodbye to this place which stinks because we really do love it. It's going to be different living in a new building with new people (first there will be the move to Amanda's parents building, where all the old people eye you suspiciously...I once got in trouble for daring to use the gym there) and new doormen, and I may even be forced to tell one particular guy that my name is not in fact "Ed."

This is not a sob story because certainly I'm willing to give up the doorman and the short commute for a great neighborhood and a new beginning. I just have a feeling that I don't realize how different it will be when I have to pick up my own dry cleaning, and have to be around when packages get delivered. Just different I guess.

On another note, one of the things for the co-op package we had to get was a credit report, and the big thing was that you weren't supposed to open it since the board might think you had altered it in photoshop. So of course i accidentally opened mine, and freaked, and of course didn't even look, only to notice that what i had opened was a letter telling me that I had already gotten my free annual credit report and if i wanted to get another one I'd have to pay. So we ordered one for each of us.

By the way, if you want to get a free credit report, check out It lets you see your score based on the top 3 credit agencies, experian, equifax, and transunion.

That's all for now.

P.S. If anyone other than my dear friend Abby Saryanne is reading this thang, please feel free to throw out some shout outs in the comments so that I know I have more than a fan of one (not that i'm complaining!)

Monday, January 7, 2008

Reality Bites

So while we are busy getting all our things together for the co-op package, a startling realization hits me over the weekend: We have less than 7 weeks left in our apartment before the big move to the in-laws.

For the past few months we had been going back and forth with them about whether it was a good idea or not for us to move in with them. It’s one of those things that sound perfect in theory, until you actually start to think about the day to day. Don’t get me wrong, I don’t mean to sound ungrateful, and at the end of the day when I think about how much money Amanda and I will be saving it’s absolutely worth it, it’s just daunting to think that I will be living with too people my parents age and I’m curious to see what the dynamic will be.

When I think about it, I haven’t lived with “adults” for almost ten years. Before getting an apartment with Amanda I’ve lived with other roommates; messy, slobs, just as careless and uncleanly as I was at that time of my life. I remember the bathroom always being dirty, the need to wear flip-flops in the shower, and an argument over whose responsibility it was to take the garbage out.

I remember living with my parents, and the biggest gripe we used to have was that I always left clothing everywhere (making it impossible for my mother to tell if the clothing was clean or dirty), I left drawers on and every light in the house (a problem which my father solved by adding dimmers to every room, which was a great idea, except for when you were trying to read and he would lower the light so that you could barely see the page). Interestingly enough, those quirks that my parents would get upset about me about, are the things that I now get annoyed when someone else perpetrates (namely Amanda) against me.

Over the weekend Amanda and I were walking through our lobby, and for the first time, I started to visualize what things would be like. I thought about the fact that in about 6 weeks I’m going to have to pack up the majority of my belongings and put them into storage. Say goodbye to my surround sound system, Nintendo Wii. My Panini Maker. (This by far, probably my favorite wedding present of all). While I won’t fall into the mindset that we are putting our lives ‘on hold,’ there is the very real notion that the majority of our stuff will be inaccessible and we will only be bringing a certain amount of items to Amanda’s parents apartment.

Before I go crazy and pretend that we are moving into a cramped apartment where we will be on top of each other, her parents fortunately have an ample sized apartment where we won’t be in each other’s way. There is a side that essentially would be demarcated as theirs and ours. For me, I plan on living as clean and neat as possible so that it seems as if I’m never there. I will definitely miss my HDTV though.

One of the interesting transitions or changes to consider is that Amanda and I love to cook (or Amanda loves to cook and I love to pretend I’m going to help, only to inevitably clean the dishes), and her Mom admits that she hasn’t used the kitchen to cook a meal since they bought the apartment so many years ago. It will be interesting to see how the dynamic works. The other will be clothing, to see how much we can realistically bring.

While we are away in California over the holidays, we told Amanda’s parents that we would love to have a meeting with them to go over ground rules for the apartment. Rather than disappoint or annoy them with what we may or may not be doing that’s to their liking, we’d love to find out going in what they would like us to do so as to avoid any confusion or frustration.

I have a feeling that during this time we won’t be staying in as much as we do normally…so I only hope (and plead, or beg) that our friends invite us over with open arms.

Wednesday, January 2, 2008

Application process: This SH*T is crazy right here

Last post was regarding the cathartic cleansing (and cleaning) of our apartment, to get rid of all our excess crap that we don’t want to take with us into the next life. If you want to hear more about that, read one post previous. But the thing we didn’t get to was that upon returning home from our trip to California to visit Amanda’s brother and wife (who is five month’s pregnant), we received our letter from the co-op board regarding our application. Or more precisely, regarding the process for completing our application process. (Quick note on missed opportunity: Amanda’s brother also recently bought a home and we saw it for the first time…we should’ve taken pictures to show the world for a before and after…as we work towards our spin off of Apartment hunting sucks/rocks, L.A.)

Amanda and I know we are not the first people to ever buy a co-op and certainly not the first ones to ever have to deal with submitting an application, but I must admit that seeing the sheer number of things they want from you is enough to send your head into a tail spin. Of course, they also want 5 copies of everything, which only adds to the confusion.

Now I know that most people who have owned an apartment say this process isn’t that bad (or actually it is…as it seems they want to know everything about you including DNA and past sexual partners), but for anyone doing this for the first time, it can feel like a nightmare.

Come to think of it, this will be the first time Amanda or I have ever been forced to take stock of all of life: I don’t think either of us have been on top of keeping order of our tax returns, past leases, and more. In the future, I think, as you get older perhaps one gets a bit more organized…but I know this will be a first.

Anyhow, this is what we have to get together just to get the application submitted (please note, commentary added):

5 (count 'em 1-2-3-4-5) copies of:

1. The previous five years of your tenancy history including:
a. Address and unit number of each lease held
b. Starting and ending dates of each lease held
c. Name and phone number of each landlord
d. Name and phone number of each managing agent
e. Copies of each lease held. (I get the feeling this one will be a nightmare. Updated: already called my former management companies and they have already put all the leases into archive).

2. The previous five years employment history including:
a. Starting and ending dates of each job held
b. Name, address and phone number of each place of employment
c. Name of supervisor at each place of employment
d. Statement of whether employment was full or part time
e. Reasons for leaving each place of employment
f. Detailed description of any times when not employed.

3. Tax returns for the latest 3 years, including copies of w-2 federal wage statements.
4. Complete list of all current assets (including bank accounts, trading accounts, IRAs, 401ks, etc) with account statements going back at least 2 years. (did this already when submitting bid for apartment)
5. Complete list of all current liabilities (including rent/mortgage, maintenance, home insurance, outstanding loans, car payments, auto insurance, and credit card bills for the past six months) with most recent account statements (ditto to above)
6. Copy of mortgage applications, commitment letter and loan approval package pertinent to this acquisition. (ditto)
7. Three months of most recent pay stubs.
8. Define the source of any deposit already committed, as well as the projected down payment for the property.
9. Credit report from experian (only one copy needed). Please note that this report must be presented in the original, unopened envelope as mailed to you. As a warning, this report will be sent to you in a non-descript envelope with simply a PO Box as a return address. (interestingly enough, we already had our credit report checked when we applied for mortgage guarantee, but it's a formality. interesting though that they want it unopened, as if we were going to photoshop it to make it better...then again i do work in advertising).
10. Please identify any guarantor or co-signator acting on your behalf in regards to your mortgage commitment. If such person is identified, please submit the complete shareholder application financial package regarding him/her.

That enough to make your head go wheeeeee? Well, the good news is that we aren’t the first people to have to do this and we certainly won’t be the last. And I think the thing we have realized during this process is that we really want this blog to not only provide entertaining commentary for our friends, but also to be a guiding post for those of you who are thinking about buying your first apartment. It’s definitely an overwhelming and truly ‘adult’ experience, but it’s something that most people will have to do in their lifetime, and both Amanda and I believe it’s easier to get some guidance from someone who has experienced what you are going through before, or at least share their experiences. Not sure the point of this diatribe, other than to say that if you are thinking about buying, don’t let this posting scare you. Our game plan for tackling this sucker is to break it down into the sum of its parts. I think if you look at the number of things that have to get done as one giant monster, it’ll never happen, but if you do it instead, brick by brick, you’ll see yourself make progress pretty quickly. It also probably doesn’t hurt if you have your shit in order.

The fun begins.