Answers (9)
- Michael Bardy, "LendingPro"
- Contributions:32
With almost every new condo development, the builders pre-arrange purchase financing with at least 1 if not 2 lenders. Should that be the case, which it probably is, your path of least resistance will almost certainly to contact the lender that the builder has made arrangements with.
I would still recommend that you compare the rate you are offered with several other lenders to make sure you are getting a sound deal. As long as the quote you receive from the lender is in line, closing with the prearranged lender will eliminate any approval or talk about the particulars of the condo project itself.
- Ty Brown, "tbro316"
- Contributions:29
All good advice, but you mentioned that this is a new condo project. I would recommend checking to see how many units are already sold and occupied. Also check on how many are owner occupied and get a copy of the projects financials if possible. Some condo projects with few sold units can be difficult to finance at attractive terms. Giving this information to your lender upfront can save you a lot of time.
- Rudi Hofmann, "LUXURY HOME LOANS CA"
- Contributions:7435
Happy funding, Rudi
- Clay Branch, "Georgia Loans"
- Contributions:8819
Does the project have preferred lenders such as Wells, Suntrust, etc ?
- Dianne Wilk, "Dianne Wilk"
- Contributions:271
First, find out if the condo is fha/fannie mae approved or not. There is a web site and your lender can check it easy enough. If it isn't approved, there is a one page condo questionaire, that can be completed. Typically the lender submits the completed questionaire out, along with a copy of the condo by-laws & regs (aka as condo docs) to the underwriter to get an idea if the condo can get either FHA financing, or mortgage insurance. If you are not familiar with the latter, mortgage insurance is required on all FHA loans but it is also required on all CV (conventional) financing with less than 20% down.
Bottom line is if the condo doesn't meet the standards you must put at least 20% down, and you are then going to have to find a lender who will finance it. If the condo has a high number of renters, or a high number of unfinished units, or a law suit pending, you are going to have a tough time finding a lender. If its under construction, my guess is the developer must have financing lined up. But beware, if its under construction, and the developer goes belly up, you value may plummet, since the remaining units will be (often not always) sold for a whole lot less since it will be a foreclosure/fire sale kind of thing.
A well run condo, with good people making sound financial decisions is worth so much! Make sure you really understand the condo's financials. You are buying into. It can be a beautiful thing, or a headache. Make sure you aren't getting the latter.
Being in NY, and if you are in NY, NY you have a lot of condos there. Here in Pgh we don't. So its different here. But I cannot stress to you enough the importance of working with good people who know what they are doing. Please don't fool yourself and work with a friend or a friend, or someone who has the cheapest rate in town. They really need to know what they are doing. I just went through a horrendous time with a large lender, and they did a terrible job. They almost blew the deal, just because they didn't do their job up front, and get all the information about the condo up front. But being in NY you should be able to find both good agents and lenders to work with.
Have a Merry Christmas (even if you aren't Christian, Christmas is like a state of mind,,,a time to reflect, be thankful, and thank Whoever you believe in) and Best of Luck!
- Marsha Andrews, "MarshaAndrews"
- Contributions:35
- None None, "25 Yrs Mtg Lending"
- Contributions:76
Click this link below and you can see if the condo project is fha approved. https://entp.hud.gov/idapp/html/condlook.cfm
IF the condo project is approved you will be able to go in with less down payment money. If the project isn't approved you should talk to the sales agent and see why the project isn't fha approved. Having the project fha approved is a huge benefit to the homeowners. When you go to sell borrowers can put less money down. FHA loans are also assumable by the new buyer when you go to sell provided that they have down payments and decent credit and can verify income. So if you close at 4.75 on a 30 yr fixed and you go to sell in 3 yrs and the going rates are 6% your buyer can assume your 4.75% rate.
- Gene Neal, "Gene Neal"
- Contributions:50
I need information about condo loans.
I just wanted to find out what type of financing options would be available to condo buyers in a new condo building (roughly 20-35 units total) in midtown Manhattan. What types of loans would be available to them and what rates, % down, etc?
Thank you!
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