Tuesday, June 21, 2011

Important mortgage information on Condominiums

 Although I have written about this before, it bears repeating.  Please be VERY careful when it comes to Condominium transactions.  We are in a brutal lending environment and having to deal with a building approval on top of the borrower's financial pedigree just adds fuel to the fire.

Question:  I am currently in the market to buy a condominium and I am fairly sure of my price range.  I am working with a real estate broker who recommended that I speak with a mortgage professional. What are the next steps?

Answer:  There are 2 areas that you MUST focus on right off the bat.  First, we will discuss your finances to make sure you qualify.  Secondly, and as important, what buildings are you looking at?  Give me the names and addresses and I will check and see if you can get financing in these buildings.  If I cannot find the buildings on a lenders list, then I will tell you what you need to do to try and get the building approved.  You see, your pedigree is only half the battle.

Question:  You recently prequalified me and I now have a signed contract for a condominium.  What are the next steps?

Answer:  Congratulations!  Let's check the building right now and see if its on anyone approved list.  If not, it would be my recommendation that we try to get the building approved before submission of your file to the bank.  The last thing we want is for you to be approved and then down the road, have a building issue.

Question:  I am looking to refinance my condo unit in order to save money.  I closed on a loan with XYZ bank 3 years ago.  I assume that I can go right back to the same bank because they approved the building 3 years ago?

Answer:  Let's look at the rate and see if it makes sense.  But, just because you closed with this bank 3 years ago does NOT mean they will do it now as the guidelines are constantly changing and what the bank did last month may no longer apply.  Let's check and see if the building is still approved at that lender.  If it is, then our best bet and easiest road would be to go back there as long as they have competitive rates.  If its not on their approved list then we need to find a bank that does or get it approved somewhere.  My recommendation is that we not move forward with the application until we have building approval.

   Everyone see the pattern here?????  Unfortunately, I have seen way too many situations in which the building is not addressed up front and it leads to nothing but heartache. 

  If you are a realtor, you should always be checking your buildings with a mortgage professional.
  If you are the borrower, make sure you check on the building with a mortgage professional.
  If you are an attorney, make sure that your borrrower, the realtor and the mortgage professional have     discussed the building.

No comments:

Post a Comment