While most homes will qualify for just about any financing, condos can be much more difficult. Since they’re a collected group of owners sharing the same land, walls, & maintenance expenditures, rules are necessary to govern the common good of the whole building or buildings.
An association of home owners or a personal management company will administer the rules, collect monthly payments, pay bills and administer repairs or improvements. For a real estate Singapore to qualify for financing the association has to be active and healthy.
- Will the building qualify for financing? Unless you are purchasing a home with cash, it is going to need to be financed. Make sure the construction can be financed with comparative ease. Find out what types of loan can be used, this can affect ease of resale if a number of loan types may be used. Browse http://www.sgnewcondolaunch.com.sg/property/highline-residences-at-district-3/ to get more details about high line residences.
- What kinds of loans can be used? Currently the most common financing options for Buying a condo are:
– FHA (government backed with only 3.5 percent down payment.
– Traditional (5-20 percent down payment, higher qualifications & probably sold on the secondary mortgage market)
– Portfolio Loan (higher down payment, bank will lend its own money & keep the loan usually at a higher interest rate)
– Money (necessary when a construction Won’t qualify for financing)
The next 6 questions will determine financing options.
- How many condos are being rented? Owner occupancy will affect financing since conventional & FHA loans allow no more than 50% to be rented. A good association will have rules set up to maintain rentals at an acceptable level.
- What’s the investor concentration? Learn if 1 person or entity owns over 10% of the construction. With smaller buildings 3-10 units if 1 person owns more than 1 condo. This is another financing principle for FHA & Conventional loans. This standard is set up so if that 1 person or entity defaults, the whole building does not suffer.
- Are more than 10 percent of those condos delinquent or behind in assessment payments? This can also be road block to financing since it’s usually leads to the whole association being unable to pay its bill or bankruptcy. Many times it is also sign that condos owners will default on their loans.
- How many condos are for sale as foreclosure or short sales? Not only do a high number of short sales and foreclosures harm values for all condos in the building however, conventional & FHA guidelines only allow for 25 percent or less.
- How much is in reserve funds? Reserve funds are supposed to cover special projects or common repairs like a roof, decks, exterior walls or other common components.
- Are there particular tests? When a condominium building doesn’t have enough reserves to pay for repairs or updates a special assessment is needed. This comes in the form of additional payments from each condo owner with a 1 time payment or monthly installment payments over a predetermined period of time ie 1-3 years.
- What’s included in monthly evaluations? Find out what your monthly assessments cover heat, electric, cable, internet, parking and common amenities such as a pool or gym.
- Parking spaces can be included as a frequent element with each unit, deeded & sold individually, or leased.