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With mortgage rates still historically low and large co-op and condo apartments difficult to find, buying two smaller apartments and combining them is an attractive option for buyers willing to renovate. And since renovations and real estate often go hand in hand in NYC, a mortgage is often the glue enabling two apartments to be joined together.
If you intend to combine apartments right away, here’s how it works:
- After you to go to contract on the apartment(s), apply for a mortgage.
- Also keep in mind that the loan-to-value ratio will be lower than a traditional mortgage, so budget accordingly.
- Finally, you’ll need to leave some money in escrow until the apartments are legally combined. Note that ‘legally combined’ is not the same as ‘fully renovated.’
If you don’t intend to combine apartments right away:
- If you plan to hold off renovating for awhile, you’ll need to finance the apartment that’s not your primary residence as an investment unit. Once you’re ready and decide to combine the units, you can look to refinance the property into a single loan.
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