How to Get a Loan for a Condo? Here’s How!
Planning on getting a condo? If you’re a bit short on the financial side then maybe it will be better if you choose to go for a home loan. Home loan allows you to pay for your condo in installments, without any pressure. You can now live in your condo while still paying for your loan, and that’s just very convenient, isn’t it? Curious on how you can apply? Here’s how to get a loan for a condo!
The lender wants to know if you’re capable in paying your loan. The first step is to know your financial capacity. The usual questions that your bank or lender will ask include your assets, monthly income (or combined monthly income in the case of married couples), liabilities, and your projected down payment.
Being prequalified, however, doesn’t mean that you have been pre-approved for a housing loan of your dreams. Prequalification is just a step for most lenders to know how much you’re going to need.
Here are the requirements that you need to be preapproved:
- Most recent bank statements
- Employment information,
- Proof of income
- Your latest income tax return
Weigh Your Housing Loan Options
Research on which type of loan you should take. Review if you should opt for the help of a lender or to go to a bank. If you want the most competitive rates in the market, then opt for banks. Though banks can have stricter preapproval process and of course, requires you a higher down payment with a high monthly payment for the principal and the interest.
Depending on your immediate need for a loan, you may experience a delay in approval, which can take as long as 90 days. In addition, once you get approved the loan option is valid for up to 6 months, after which you need to submit your latest documents to get approved again.
Another factor to consider is that getting a condominium is much pricier than getting normal house and lot. Condominium mortgage involves a higher interest rate and of course a bigger down payment. It’s because a condominium unit is a big part of a whole building. When the value of one unit depreciates, then the others will result in having a decreased value too.
Add to that, condominiums have added fees. There are two types of fees to consider: average fees which are fees for condominium developments that have swimming pools, tennis courts, and fitness centers. These amenities may cause for paying higher maintenance and liability costs and therefore higher condominium fees. It will be for the better if you do a research on the fee history of the condominium development that you’re going to choose.
Meanwhile special fees are for developments that will also ask you for fees for roof maintenance and other utility maintenance issues like maintaining the lobby.
Getting a home loan for a condominium can be easy, if your finances are ready for inspection, and of course for shelling out.