I was told by someone that if you buy a condo, as opposed to a home, that one can expect a mortgage rate difference of roughly 0.25%, due to the fact banks see condos as more risky/ harder to sell. Is this true?
3 Comment(s)
Depends on your situation. If your LTV (Loan to Value, aka how much you need to borrow to pay for the home, or the home value minus your downpayment) is higher than 75% you can expect your rate to be about .5% higher. If you’re below the 75% LTV mark generally there’s no difference depending on which lender you’re using.
rates arent usually higher, sometimes the costs will be higer. A lot of lenders increase your rate so they dont have to charge you more, but its technically a point adjustment.
IN FL yes this is true. More and more Condos are going under due to the economy so their risk is high.By this I mean- that several owners in a condo are having financial difficulties and may be losing their units to their lenders,, therefore they have not paid their Association Dues– therefore the rest of the Condo Members must make up the short fall for the non paying owners– which pushes more owners into financial difficulties- thereby creating a ‘snowball rolling downhill effect”. Soon no one can pay the Association dues- and in a condo that is crucial (Insurance for the building, building maintenance, elevators, ground maintenance,water, sewer, cable …all paid by Association Dues)…
It isn’t talked about yet in the general media- but it is seen in the local economy.
Depends on your situation. If your LTV (Loan to Value, aka how much you need to borrow to pay for the home, or the home value minus your downpayment) is higher than 75% you can expect your rate to be about .5% higher. If you’re below the 75% LTV mark generally there’s no difference depending on which lender you’re using.
jmac | Nov 7, 2009 | Reply
rates arent usually higher, sometimes the costs will be higer. A lot of lenders increase your rate so they dont have to charge you more, but its technically a point adjustment.
cheeba0228 | Nov 9, 2009 | Reply
IN FL yes this is true. More and more Condos are going under due to the economy so their risk is high.By this I mean- that several owners in a condo are having financial difficulties and may be losing their units to their lenders,, therefore they have not paid their Association Dues– therefore the rest of the Condo Members must make up the short fall for the non paying owners– which pushes more owners into financial difficulties- thereby creating a ‘snowball rolling downhill effect”. Soon no one can pay the Association dues- and in a condo that is crucial (Insurance for the building, building maintenance, elevators, ground maintenance,water, sewer, cable …all paid by Association Dues)…
It isn’t talked about yet in the general media- but it is seen in the local economy.
pink elephants | Nov 12, 2009 | Reply