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Getting Financed For The Condo You Want
The process of obtaining a mortgage for a condo is different from getting one for a single-family home. This is because condos are usually part of larger complexes and are subject to certain restrictions and regulations.
By: Coldwell Banker Schmitt Real Estate
There are two main types of loans available for condos: conventional loans and FHA loans. Conventional loans are available through banks and credit unions, and they typically have higher interest rates than FHA loans. However, they may be a better option for borrowers with good credit who can afford a larger down payment. FHA loans are insured by the Federal Housing Administration and are available through most lenders. These loans tend to have lower interest rates and may be a good option for borrowers with less-than-perfect credit or who can't afford a large down payment.
When considering a loan application for a condo, lenders will look at several factors. One of the most important is the financial health of the complex itself. This includes looking at the HOA's delinquency rate, any pending legal actions, and any restrictive covenants that may be in place. (You might also have to be vetted by a property owner's association, in addition to the homeowner's association.)
Lenders will also look at the insurance requirements of the complex and whether the HOA has approval from the lender to purchase the unit. Lastly, lenders will consider the ratio of owner-occupied units to rental units in the complex. If there are too few owner-occupied units, you'll find it difficult to obtain financing. Conversely, if the vast majority of units are owner-occupied, financing will be easier to secure.
As you can plainly see, there are many factors to consider and more hurdles to jump in order to get financing for a condo, making the process significantly different than purchasing a single-family home.
If you're considering purchasing a condo, it's important to be aware of the different financing options available to you. Be sure to work with a lender who can help you understand your options and make the best decision for your situation. With a little preparation, you can be on your way to owning the condo of your dreams!
For more information about Islamorada Luxury Homes for sale in the Upper Florida Keys, please contact Jan at http://www.islamoradajan.com