Condos are different From buying a single family home, town home, or apartment building. Condos can be more challenging, Although most homes will qualify for any funding. Since they are a gathered group of owners sharing the same property, walls, & maintenance expenditures, rules are required to govern the common good of the whole building or buildings. An association of a management company or home owners administers repairs or improvements, collect payments, pay bills and will administer the rules. In order the institution has to be healthy and active. Here are 10 tips to get your condo buy smoother prior to making an offer, and flush out all of the challenges.
- Will the building qualify for financing? Financing options tightened up and have changed. It is going to have to be financed unless you are purchasing a house with cash. Make sure that the construction can be financed with ease. If loan types may be used Learn what types of loan may be used, this can affect ease of resale.
- What types of loans can be used? Presently the most common financing options for Buying a condo are:
– FHA (government Backed with just 3.5percent down payment. Building Needs to be FHA approved and meet guidelines)
– Traditional (5-20percent down payment, higher qualifications & probably sold on the secondary mortgage market)
– Portfolio Loan (higher down payment, lender will lend its own money & keep the loan generally at a higher interest rate)
– Money (necessary when a construction would not qualify for funding )
The next 6 questions Will determine financing choices.
- Condos are being rented? Finances wills impact since conventional & FHA loans allow no more than 50 percent to be leased. A institution will have rules to maintain rentals.
- What is the investor concentration? If 1 person or entity owns over 10% of the construction Learn. With buildings that are smaller 3-10 units if more than one condo is owned by 1 person. This is another principle for Conventional & FHA loans. This standard is set up if that entity defaults or 1 individual does not suffer.
- Are more than 10 percent Of the condos in or behind delinquent evaluation payments? This may be street block since it is usually results in the association to financing being unable to pay bankruptcy or its invoice. Many times it signals that condos owners will default on their loans.
- Condos are Available as short or foreclosure sales? Not only do values are harm by a high number of foreclosures and sales in the building however for many condos, FHA & traditional guidelines allow for less or 25 percent.
Before starting your Van Holland Koh Brothers Condo search be certain that you receive pre-approved for financing. This will help guide on your condo search by allowing you to know which buildings will qualify for that kind of financing and which funding. The feeling that is unsatisfactory finding out that it will not qualify for the kind of financing you is currently using and are finding that location.