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October 28th, 2009 4:19 PM by David W. Welch
When the rules changed on condo financing back in the spring of this year, it had a tremendous impact on condo owners and would be condo buyers. If the condo you are interested in purchasing is FHA approved, it still has to meet a number of strict criteria. FHA of HUD approval does not guarantee that you can obtain FHA financing. There are not a lot of absolutes in real estate where everything is negotiable to some extent. Here is one absolute that you can take to the bank - actually you can't take it to the bank. There is no bank financing available to investors purchasing condos. I don't even think a loan shark would loan to a condo investor these days, it is difficult enough for someone purchasing a condo as a primary residence or second home.
If you are purchasing a condo as a primary residence you better have a minimum of a 690 credit score, 20% to put down and be prepared for an adjustable rate mortgage. Second home buyers need a 710 minimum score at least 20% down and will also face an adjustable rate mortgage. Some recent quotes on these ARM's are 5.25% on a 3/1, 5.5% for a 5/1 and 6.5% on a 10/1 ARM. The only fixed option is 6.25% for a 15 year mortgage. Let's face it rates are probably not going to be much lower than they are right now, so these ARM's will adjust upwards. I would like to thank Jeffrey Sachs with FBC Mortgage for giving me some insight on the condo financing situation.
Orlando Real Estate, David Welch Real Estate Optimist