Condo buyers can select the properties for primary homes or a vacation property. The properties are exceptional choices for living nearby the coastline or beach. Buyers choose the properties if they want extra amenities that are exclusive to property owners only. Reviewing details about buying a condo helps the buyers prepare for the next step.
Reviewing the Buyer’s Credit Scores
Reviewing the buyer’s credit scores determines if they qualify for their preferred mortgage loan program. Typically, lenders prevent the borrower to have a credit score of at least 580 to qualify for the mortgage home loan. The borrower must understand that a low credit score could mean a higher interest rate and monthly payment. Reviewing qualifications for the mortgage loan program helps the borrower make decisions about when they should buy and what they can do to improve their credit rating before they buy a condo.
Is the Property the Primary Home?
The condo must be the primary home if the borrower wants to use the FHA mortgage loan program to buy the property. It cannot be a vacation home, timeshare, or a rental property. If it isn’t the primary home, the buyer must select a different mortgage loan program. Vacation homes and any type of investment property will also require a higher down payment to secure the mortgage home loan. Conventional mortgage home loans might be a better choice for a second property purchase.
Reviewing Condo Fees and Dues
When buying a condo, the buyer will face condo fees and dues that they must pay according to their schedule. These fees and dues apply to maintenance services for the exterior of their condo and all communal amenities that are available to all condo owners or tenants. When securing a mortgage home loan, the property buyer will need to pay their fees and dues on time or it could cause issues with their mortgage home loan contract. The condo association could report the buyer if these payments are made in a timely manner and it could violate the terms of owning the property.
Are All the Units Owned or Rented?
When evaluating a condo and approving it for a mortgage home loan program, the lender reviews the total number of units that are owned and how many are used for rental properties. When investing in a property, the lender will want the borrower to choose a condo in a community that has more homeowners than rental property tenants.
Does the Property Meet HUD Standards?
All condos must meet HUD standards to be qualified for a mortgage home loan. The standards apply to the structural condition of the condo itself and the properties connected to the unit. Communal amenities are evaluated, too. If the property doesn’t pass the inspection, the property isn’t approved for the mortgage home loan program.
Condo buyers review their credit scores before approaching a lender. It is recommended the buyer have at least a credit score of 580. When buying a condo, the owner must abide by a condo association’s rules. Homebuyers who want to learn more about buying a condo get more information from NRIA now.