How to buy a condo
If you’re considering taking advantage of low mortgage rates and becoming a homeowner, deciding what kind of home to buy is one of the first decisions you’ll make. Will it be a new construction single-family home or a manufactured home? Or, are you leaning toward a condo? Lower prices and less maintenance can be big appeals of owning a condo. A condo can also provide a sense of community and more amenities than other types of homes.
Short for condominium, a condo is defined by ownership rather than a style of building. A condo is a private residence owned by an individual homeowner with joint ownership of common areas. When you’re looking into how to buy a condo, it’s helpful to understand how condo ownership works because it impacts condo financing.
The condo mortgage process
The condo mortgage process is different from the loan process for single-family homes. While condos generally cost less than single-family homes, they may require a much larger down payment and higher interest rates. Guild offers the following condo mortgage options:
What to look for when buying a condo
Location is always an important factor when buying a property. Consider not just the surrounding neighborhood but also where the condo is situated within the property. Is it on a busy street or overlooking a park? Is there easy access to parking or access to public transportation? Once you’ve settled on the ideal location for your lifestyle, here are five questions to help narrow down what to look for when buying a condo:
- Where’s the unit? Different floors can have different values, and fewer shared walls mean less noise from the neighbors.
- Is the parking guaranteed, and is it an additional fee? Guaranteed covered parking is great, but you may pay extra for it.
- What are the amenities? Shared amenities may include parks, tennis courts, barbecue areas and swimming pools. Some condo complexes offer amenities specifically for children or pets.
- What can be changed inside the unit? If you’re looking to buy a fixer-upper, be advised that there may be strict rules about the types of renovations you can make.
- What are the HOA or condo association dues? Depending on the guidelines, fees can fluctuate, so be sure to ask how often fee increases occur.
Other things to consider when buying a condo
One of the most significant things to consider when buying a condo is the condo community’s financial standing. Condos in communities that don’t have a healthy financial standing are considered ‘non-warrantable’* and can be hard to finance. Suppose the condo association has financial problems or doesn’t have full responsibility of the condo complex. In that case, they may not have the required creditworthiness. Read more signs that the community is warrantable.
New developments also have some stipulations. Incomplete projects are non-warrantable*, as well as complete projects where the developer still has control over the HOA.
Are you ready to take the first step toward purchasing a condo? Let us walk you through the condo loan process, including how to get pre-approved. Contact us today!
*Guild Mortgage does not currently lend for non-warrantable condos.
The above information is for educational purposes only. All information, loan programs and interest rates are subject to change without notice. All loans subject to underwriter approval. Terms and conditions apply.