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Archive for the ‘Condo financing’ Category
Wednesday, August 26th, 2009
Condo financing can be difficult at times but not impossible. Most conventional financing programs will require the condo to be less than four floors and have more than 50% of the condo units be occupied by their owners. The loan limits must also be under the conforming limit currently at $417,000. With these restrictions you might think that all is lost if you are buying a condo but nothing is further from the truth.
More and more developers are looking to non-warrantable condo financing as a tool to grow their business. Developers are seeking qualified buyers and with today’s uncertainty in the economy are finding it difficult to obtain financing for their projects. Traditional lenders today require a condo questionnaire as well as the condo association docs for each unit they are looking to sell but with non-warrantable condo financing all is needed is a one-time approval and then all subsequent loans can go through underwriting quickly. When you are looking to purchase that condo in the development that seems a little outside the box, don’t despair, financing is available if you know where to look.
As with all condo financing there are documentation requirements which may seem daunting but is not as difficult as you may think. Which mortgage you select will determine the exact documentation requirements and listed below are the most common.
- Last two years W-2 forms
- Last two paystubs (enough to cover 1 month)
- Last two years signed 1040’s and all schedules
- Last two months bank statements, all pages
- Current statement for 401K or IRA accounts
- Complete list of your current debts (usually taken from your credit report)
- Copy of the sales contract
- Copy of your driver’s license, picture ID or passport prior to closing
- Gift letters signed by the donor and proof of receipt and ability to gift funds
- Copy of the earnest money check, both front and back
- Your insurance agent’s contact information
This may look like a lot to ask but lenders who are providing condo financing need this information to make a reasonable decision which protects everyone involved, especially the buyer.
Once you have found the condo you wish to purchase and have contacted a lender there is another consideration, closing costs. It is wise to speak with several lenders to shop rates and closing costs. It can be as varied as there are lenders available. Listed below are some common examples of closing costs on most loans.
- Origination fee
- Discount points (sometimes used to get a lower rate)
- Application fees
- Lock in fees
- Underwriting or doc prep
- Flood certification (verifies the property is not in a flood plain)
- Tax service fees
- Appraisal
- Credit report fee
- Title search
- Title insurance
- Recordation fees (fee to record the new deed)
- State and county transfer taxes as required.
This all seems like a lot of information to ask for and a lot of cost, but look at it this way. For most people you are buying the single most important financial investment you will ever make in your lifetime. When all is said and done and you move into your new condo, you will be glad you did.
Tags: Buying a condo, Chicago Condos, Chicago condos for rent, Chicago condos for sale, Chicago Real Estate, Finance A Condo
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Monday, July 13th, 2009
Condo lending is much different from residential home lending. There are many issues that lenders will look at when lending on a condominium versus a house. The best thing to do is to talk to a condo lender that focuses on condominiums exclusively. They will have the best knowledge of the financing programs available for first time buyers, renters that want to own through a rent-to-own program and jumbo loans.
Condo lending starts with doing a credit application to see exactly where you qualify. If you’ve had credit issues and have been late with several bill payments, the credit report will show this. Most lenders will report back to you immediately to go over a game plan of exactly how to clear these credit issues up, but this is the first step in obtaining a loan to purchase a condominium.
What happens if the credit report comes back fine and the lender says they would be interested in financing you? What’s next? They will go through all your credit history and your current income situation to evaluate how much loan you can afford today. They base everything on numbers. If you’re making 1en thousand dollars a month, you’ll be able to afford a condo mortgage different from someone that makes three thousand per month. If you make ten thousand per month and so does you neighbor but you have sixty thousand in credit card bills and he doesn’t, the condo lender will qualify him for a larger loan that you. All of these things will be taken into consideration when doing a condo loan.
Condo lending doesn’t end there. Once your credit has been checked and you’ve been pre-qualified for a loan amount, you’ll need to choose the program you’ll be financed under. There are all types ranging from adjustable rate mortgages to fixed rate loans. Adjustable rate mortgages means the interest rate that you’ll pay on the loan adjusts every so often. Because of this, you’ll normally see the rate lower in the beginning of the loan and then go up over time.
The biggest thing to remember about financing a condo is to make sure you’re in front of people that know what they’re doing. Work with a professional that’s been in the business for awhile and make sure they specialize in financing condos. Homes are one thing, condominiums are another. Pick a specialist! They’re worth their weight in gold.
Tags: condo, Condo financing, condo lending, condo loans, condominiums, condos
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Friday, June 12th, 2009
The condominium market has long been an alternative housing option that is increasing in popularity each passing year. From the first time buyer to the step down condo buyer all are an attractive means for home ownership. To finance your condo in the current market can be challenging but not impossible. Fannie Mae, one of our government backed mortgage-finance companies has added some restrictions that can make it more difficult for developers to sell their properties. A new policy effective March 1st raised the amount of units sold from 51% to 70%. In addition, Fannie Mae will not back loans for sales in buildings where 15% or more of the current owners are delinquent on their association fees or where more than 10% of the units are owned by a single entity. Fannie Mae says these restrictions protect the developers and taxpayers from throwing good money into troubled developments but many condo developers disagree and have petitioned Fannie Mae for exemptions. To date more than 50 petitions have been filed and granted allowing condo buyers to purchase.
It is for first time home buyers but there are several things to consider before you can qualify. To finance your condo you cannot have owned a home in the last three years but your spouse has owned a principal residence, neither you nor your spouse would qualify for the first time home buyer tax credit. However, unmarried joint purchasers may allocate the credit amount to any buyer who qualifies as a first time home buyer. A good example would be if a parent jointly purchases a home with a son or daughter. Also, ownership of a vacation home or investment property not used as a principal residence within the last three years would still qualify you for the tax credit. There is movement in the Congress now to enable the buyer to use the tax credit at time of closing their loan and not waiting till next year when taxes are filed. The final decisions have not been made yet but it looks like it could happen at any time, so stay tuned!
To finance your condo there are income limits for the program but they have been made generous to encourage more buyers into the real estate market. To receive the full $8,000 home buyer tax credit a single buyer cannot have more than $75,000 in modified adjusted gross income and married tax payers filing a joint return cannot make more than $150,000 in modified adjusted gross income. Now that does not mean that buyers making more than those amounts will not receive any benefit from this program, it only means they will receive a reduced amount based on their income level. In other words, almost anyone can benefit in some form with this program.   Interest rates are down, prices are very reasonable, and now $8,000 in tax credits, what are you waiting for!
Tags: Buy a Condo, Chicago condos for sale, Chicago Real Estate, condos for sale in Chicago, condos in Chicago, Finance A Condo
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Thursday, May 28th, 2009
The condominium market has long been an alternative housing option that is increasing in popularity each passing year. From the first time buyer to the step down condo buyer all are an attractive means for home ownership. Financing your condo today in the current market can be challenging but not impossible. Fannie Mae, one of our government backed mortgage-finance companies has added some restrictions that can make it more difficult for developers to sell their properties. A new policy effective March 1st raised the amount of units sold from 51% to 70%. In addition, Fannie Mae will not back loans for sales in buildings where 15% or more of the current owners are delinquent on their association fees or where more than 10% of the units are owned by a single entity. Fannie Mae says these restrictions protect the developers and taxpayers from throwing good money into troubled developments but many condo developers disagree and have petitioned Fannie Mae for exemptions. To date more than 50 petitions have been filed and granted allowing condo buyers to purchase.Â
Not all is lost with these restrictions because there is financing available which has long been available but not often used because credit was much easier to obtain. When financing your condo you may want to look into non-warrantable condo financing. Let’s say you have a condo you want to buy and the project is new with few units sold. Fannie Mae will not finance your mortgage because not enough units have been sold but units cannot be sold because financing is not readily available. It’s the chicken or the egg syndrome. Non-warrantable condo financing has no pre-sale requirements which means you could be the first buyer wanting to purchase in a development many times realizing updates and benefits not offered to the buyers coming later.Â
When you are financing your condo there are documentation requirements which may seem daunting but is not as difficult as you may think. Which mortgage you select will determine the exact documentation requirements and listed below are the most common.
- Last two years W-2 forms
- Last two paystubs (enough to cover 1 month)
- Last two years signed 1040’s and all schedules
- Last two months bank statements, all pages
- Current statement for 401K or IRA accounts
- Complete list of your current debts (usually taken from your credit report)
- Copy of the sales contract
- Copy of your driver’s license, picture ID or passport prior to closing
- Gift letters signed by the donor and proof of receipt and ability to gift funds
- Copy of the earnest money check, both front and back
- Your insurance agent’s contact information
This may look like a lot to ask but when financing you condo the lenders need this information to make a reasonable decision which protects everyone involved, especially the buyer.
Tags: Buying a condo, Chicago condo company, Chicago Condos, Chicago condos for sale, Condo financing, condos in Chicago, First Time Homebuyers
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Sunday, April 12th, 2009
Is the right time to buy a condominium? Questions about the economy, and falling housing prices have kept the real estate market stagnant, but 2009 appears to be the year that this changes, and the housing market starts to rise again. Financing Chicago condos is now a realistic option for first time home buyers. Before you can finance your condominium, you need to find it first! OwnACondo.com allows you to search through thousands of listings within the Chicagoland and Northern Illinois region.
Once you find the right condominium, you need to look at home financing options. To begin, you can easily submit your information on-line to a mortgage professional for review. Then, let’s explore home loan options…FHA or Conventional? FHA allows for more flexible debt to income ratios as well as a lower down payment. However, Conventional loans can often net a lower mortgage rate, and more condominiums qualify as they do not have to meet certain FHA guidelines. With interest rates now at historic lows, you need to take advantage of this unique opportunity to own a condominium. Also, for first time home buyers, you also can take advantage of the eight thousand dollar tax credit that is being extended for 2009. The combination of interest rates, loan opportunities, and a massive tax credit make 2009 the year for you to finally own a home of your own. Financing condos in Chicago and throughout Northern Illinois has never been better!
OwnACondo.com is ready to help you purchase a home of your own. Our experienced team of real estate agents will guide you through the home buying process, and our preferred mortgage lenders can assist in providing the right financing options that fit your specific needs. Buying a home is one of the most important purchases you can make, and home owners historically have a much higher net worth than do renters. Start building for your future today. 2009 is a great year to purchase a condo of your own, and financing your Chicago condo is now more attainable than you realize. Take advantage of low mortgage rates, and a eight thousand dollar tax credit, and live the American dream of having a home of your own.
Tags: Buying a condo, Finance A Condo, finance your condo, First Time Homebuyers, Homebuyer tax credit
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Thursday, April 9th, 2009
You’ve found your favorite condominium to purchase. Now you need financing. Where do you go to finance a condo? To finance a condo in today’s market it can be a bit of a challenge, but certainly not impossible. Over 30,000 condos closed and were financed in the Chicago area in 2008. Someone was out there financing condos.
Financing companies generally look for a few things when financing a condo. They start out with checking your credit score. Each month all of your credit card companies, your auto loans, etc. will report to a credit bureau rating you on how you’re paying off your debt. The credit agencies take all this information and create a “credit score†for you. Banks and lending institutions take this score to heart and many times will not lend to a person if they have a score even one below what is required. It’s all black & white many times.Â
Most loans can get done with a credit score of 580 or above. People that are in the range of 700 or above are considered excellent candidates to give a loan to. The next step is your down payment. How much money will be paid cash for the condo and how much of the money will be financed. When financing a condo, the banks will look at many factors, but the more down payment you have, the better. If the condo you’re trying to purchase a condo for $200,000, typically you’ll need 5% of that in cash or $10,000. If you were to put 20% down or $ 40,000 the banks risk position is much less and it makes doing the loan almost a slam dunk.
So to summarize, financing a condo comes down to having a good credit score and having a significant down payment. Even with this as the main criteria, if you have a blemished credit score and zero dollars, there’s always ways to find a way to purchase a condo. For the tenant that wants to buy his or her condo but does not have a down payment, there are rent-to-own programs out there that allow you to utilize some of the rent payment toward a down payment. Secondly, the person without a down payment can borrow the money from mom or an investor. In the end, if you really want to finance a condo, it can be done. You just have to want it bad enough.
For more information on financing condos, you can for to “FinanceACondo.comâ€. They specialize in financing condos throughout the United States.
Tags: condminiums, Condo financing, condos, Finance A Condo, financing condos
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Saturday, April 4th, 2009
OwnACondo.com is the best place to buy or sell a condominium. We are not newcomers to the condo market, we are seasoned veterans. So in addition to being the best place to buy or sell a condominium we are your condo resource and we also understand Condo Financing. It is very different from financing a house or even a car. View our list of preferred lenders who are ready to help you understand Condo Financing, the process from beginning to end.
A condominium is different from a house in many ways and so is the Condo Financing Today, the mortgage industry is focused on making sure that if you are looking to purchase a condo that you are more than capable of paying not only the mortgage, but property taxes and also your condo assessments. Condominiums usually have a monthly assessment, which are fees that are assessed to each unit for the expenses of the common areas, such as: hallway electric, hallway cleaning, lawn care, snow plowing, water, sometimes gas (especially if the heating system is shared throughout the entire building and other expenses such as repairs to the building itself. Though it does not seem like it would have any impact on Condo Financing it does. Monthly assessments paid to the Condo Association can easily average $200 per month, adding to the bottom line of your monthly expenses.
In most cases, the property taxes for a single condominium are far less than the property taxes on a home. You can expect to set aside an average of $100 per month to cover the expenses of your property taxes.
It is strongly recommended that before you begin your search for the perfect Chicago Condo that you get pre-qualified with one of OwnACondo.com’s preferred lenders. This way you will have a great understanding on what to expect and also what you can afford. Our preferred lenders will explain Condo Financing, the mortgage process as well as the different types of mortgages that are available today. They will also explain how much of a down payment would be necessary.
So if you have been thinking about starting a search with and OwnACondo.com Condominium Specialists, then now is the perfect time to call one of our preferred lenders. Once you have completed the pre-qualification process you are on your way to start searching for the perfect condominium.
So visit us today at OwnACondo.com and let one of our Condominium Specialists help your find the condominium of your dreams.
Tags: Condo financing, Condo Mortgage, Condo Specialist
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Monday, January 26th, 2009
Your credit score has become increasingly important in many aspects of your financial–and even personal–activities. It’s well known that a healthy credit score is required for loans, like for a Chicago condo or suburban Chicago condo, but did you know that credit standing is often looked at to determine your risk for insurance, and sometimes even a job?
With so much hinging on one’s credit score, it’s unfortunate that so few people really understand how it is calculated. People often view their credit score as part science, part art, maybe even part weird magic. But although it is admitedly somewhat complicated, it is relatively easy to understand the basics and, most importantly, what it takes to achieve a high(er) score and how to stay there. It’s important to realize that not every action you take or don’t take has the same impact as others.
“There’s more to a credit score than paying your bills on time,” says atorney and loan professional Larry Bettag. Check out his Five Factors Affecting Your Credit Score.
Tags: Condo financing, credit score, Finance A Condo, finance your condo
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Sunday, November 23rd, 2008
Not only is OwnACondo.com a full service Chicago real estate company focusing solely on Chicago condos and suburban Chicago condos, but it also can have them financed through their subsidiary company, FinanceACondo.com.
FinanceACondo.com can give you a quote fast and put you in front of a professional as soon as you are ready. They can also refinance your condo as well.
If you”re looking to buy, sell, finance or re-finance your condo, call us today at 866-696-2266 and we”ll be ready to answer all your questions.
Tags: condo, Condo financing, condominium financing, Finance A Condo
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Tuesday, November 18th, 2008
Dear potential condo owner,Â
OwnACondo.com has answered the needs of thousands by creating a way for many people to get into condo ownership where originally they””ve been unable to. Our rent-to-own programs have attracted thousands to our condo company.  It”’’s a perfect alternative in today”’’s market place where lending has been extremely tough to get.
We have over 500 condo units to choose from throughout the entire Chicago area ranging from $600 per month in rent, all the way beyond $4,000 monthly. You pick and choose the style and size of the condo based on your affordability. The price of the condo is negotiated at the time of the rental and every transaction is different based on the buyer and seller needs.Â
I””ve been in the real estate business for more than 24 years and have never seen these type of buying opportunities. This is a perfect time for a buyer to lock in a price of a Chicago Condo while renting for a period of time. Once the allotted time has ended, the buyer has the right to excercise his or her option to buy that condo. If the price of the condo has fallen due to market conditions, the buyer is not obligated and can either re-negotiate the price or pass all together. On the other hand, by locking in on a price, if the condo goes up in value, the buyer wins.Â
The seller’s advantage is they now have an occupied unit with a tenant paying rent rather than a vacancy. Once the buyer is in the unit, they””re more likely to buy the unit than move out. It creates a win-win for everyone.
If you””re interested in talking with a Chicago Condo specialist on our rent-to-own programs, please call us at 866-696-2266.
Tags: Condo financing, financing condos, rent to own financing, Rent to Own Programs
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