Borrowers run into two problems when getting a mortgage on a condominium: strict standards that make it hard to qualify for a condo loan, and high costs.
These issues beset condo buyers who want to get mortgages as well as people who already own condos and want to refinance.
“Condos are like the canary in the coal mine, a leading indicator of the health of the real estate market,” says John McClellan, a branch manager with Supreme Lending in Austin, Texas. “Recently, lenders’ biggest losses came from condos, so they are viewed as risky.” Some lenders reject condo loans altogether.
Condo loans have to jump through two hoops. First the borrower has to qualify. Then the condo association has to qualify. The borrower has little or no control over the latter.
“Condo financing is very situational because it depends not only on the borrower, but also on the project itself,” says Matt Ostrander, CEO of Parkside Lending LLC in San Francisco. “The guidelines have tightened because lenders want to see a financially healthy condo development. They want to see a higher concentration of owner-occupants and they want to see that delinquency rates on condo fees are low.”
Financing for Albuquerque Condos
via bankrate.com
This is a great article about an issue that we often run into when dealing buying and obtaining a mortgage for an Albuquerque Condo, particularly a condo in a newer development. Lenders want to see a minimum percentage of units sold, a certain ration of homes occupied by owners versus renters, and approve of the Home Owner’s Association. All of these factors are outside of the control of the purchaser. When buying an Albuquerque Condo, consider using a Realtor who knows the condo market and perhaps find out in advance if a condo will qualify for the mortgage you’re trying to obtain before going out to see the unit.
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