Final answer:
Jennifer would most likely get a housing cooperative loan for her co-op purchase in Manhattan. This type of loan is different from standard mortgages as it's for shares in the co-op and a proprietary lease. Lenders experienced in co-op loans would be essential.
Step-by-step explanation:
Jennifer purchased a co-op in lower Manhattan for $655,000. The type of loan she would most likely obtain to purchase her unit is a housing cooperative loan, which is a specific type of mortgage loan used for co-op units. Unlike traditional home loans where the collateral is the physical property itself, a co-op loan is for shares in the housing cooperative and a proprietary lease. These loans might be more complex than standard mortgages and can vary by state or even by building. It's essential to work with a lender experienced in co-op loans.
In terms of understanding the financing behind purchasing a home or co-op, let's consider Joanna's situation. With an annual amount of $12,000 available for house loan payments and an interest rate of 4.2% over a 30-year term, there are formulas and calculators that can determine Joanna's maximum loan affordability. Similarly, if Jennifer were to obtain a loan with these parameters, she would be able to calculate her maximum loan and total payment over the years.
Additionally, when owning a property as with Freda and Ben, the value of the real estate can fluctuate over time. Freda's property value increased, as did Ben's, but it's important to recognize that these value changes do not directly affect the terms of any existing mortgage unless they decide to refinance.