While buying a co-op versus a condominium might seem like it would be the same thing, there are some significant differences.  One aspect of those differences is in costs.  Buying a co-op means that you’re purchasing shares in the cooperative, as opposed to the tangible real estate that you’re buying with a condominium.  That means there are some costs that do NOT apply to co-ops.  Those costs include New York mortgage tax, which can be as much as 2% of the mortgage amount in the 5 boroughs of New York City, which applies to a condominium but not to a co-op.  There’s also title insurance, which is required for a condominium that does not apply to a co-op.  Rather that title insurance, a co-op only requires a lien search, which is much cheaper at only around $300-400.  On the other hand, co-ops are much more restrictive than condominiums, and may limit your maximum financing percentage (also known as your Loan-to-Value) as well as your maximum permitted debt ratio to amounts that are well below what Fannie Mae and Freddie Mac will allow.  So while buying co-ops may be cheaper both in terms of median price as well as costs, it’s important to understand that restrictions required by co-ops that do not apply to condominiums.

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