Financial Health – this is one area where homes and condo’s vary greatly. The vast majority of the time with a condo Financing in General – Getting a mortgage on a home vs a condominium can be vastly different. When buying a home it is pretty straight forward. You essentially get the type of mortgage you are looking for and that is it. You can choose the type of loan whether it is a conventional, FHA or VA, if you qualify. With a condominium you need to verify upfront that you will be able to use certain types of loan products.
For example some condo developments are not FHA approved. You might be asking yourself why not? It’s a great question! It does not cost a lot of money to get FHA approved yet some condo associations do not understand the importance. As a someone interested in a condo you should because without the ability to get FHA financing quite a few buyers are locked out from purchasing. This of course can affect the long term value of your property.
The advantage to a buyer getting an FHA loan is the fact you only have to come up with a 3.5% down payment. When a condo development is not FHA approved it locks a large percentage of buyers out. When searching for a condominium to buy make sure you ask your Realtor to check up front whether the condo is FHA approved if this is the type of financing you are planning on using.