Financing Your Condo, Co-Op, or Townhouse
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You've been dreaming of a place to call home, and acquiring a condo, co-op, or townhouse seems like an ideal solution. You might think that buying one of these properties is less complicated than buying a house, but the reality is that finding financing can be much more challenging than you can imagine. These loans come with their own set of terms, and are often so complex that even the most knowledgeable loan officers don't understand them. If you're a first-time buyer, there are a host of issues that can blindside you, making paying for your dream home seem daunting. And if your potential purchase doesn't meet your lender's stringent guidelines, then you'll pay a higher interest rate, perhaps put more money down ... or not get financing at all.As a veteran mortgage banker and author of Mortgages 101, David Reed has helped thousands of buyers through this complicated process. Financing Your Condo, Co-op, or Townhouse offers you crucial advice, including information on developer financing, specialty loans, refinance loans, ways to streamline the approval process, appraisals, and closing costs. This easy-to-understand guidebook explains:the key differences between condos, co-ops, and townhouseshow to find the right type of property for youthe rules governing loans for condos, co-ops, and townhouseshow to evaluate which loan type is best for you and lock in the lowest ratewhy the percentage of owner-occupied units is importantwhat to look for when buying from a developerhow to benefit from government programs for condos and townhousesand much moreFilled with sample monthly payment schedules and an invaluable glossary of terms, this book will helpyou find the home of your dreams, at a price you can afford.
Preface viiChapter 1 Condos, Co-ops, and Townhouses: How are They Different and How are They Similar? 1Condos 2Co-ops 5Townhouses 6The Lifestyle 9The HOA 12Lawsuits, Fees, and HOAs 15Chapter 2 What to Look for in a Property and How to Find the One that's Right for You 17Using a Realtor 18Buying from a Developer 21Chapter 3 Financing Your Condo, Co-op, or Townhouse the Right Way 29Fixed-Rate Mortgages 30Adjustable-Rate Mortgage 36The Hybrid 39Option ARMs and Negative Amortization 42How Mortgage Rates Are Set 44How Lenders Set Their Rates 47Types of Mortgage Lenders 48How to Find the Best Loan Officer 57How to Find the Best Rate 62Factors That Can Affect Your Rate Quote 71How to Change Mortgage Companies Midstream 77How to Lock in the Mortgage Rate 79Debt Ratios and How Lenders Calculate Them 83Chapter 4 Speciality Loans, Government Programs, and Refinance Loans 85Interest Only 85Equity 87No Money Down 88Government Bond Programs 89Portfolio 90Refinancing 91Government Programs for Condos and Townhouses 104Down Payment Assistance 113Chapter 5 Rules Governing Loans for Condos, Co-ops, and Townhouses 115Warrantable Versus Nonwarrantable Projects 122Chapter 6 The Impact of Credit on Your Ability to Buy a Condo, Co-op, or Townhouse 127Check Your Credit First 132Find Out Your Credit Scores 136Credit Score Facts and Fallacies 143Credit Scores and Qualifying 147Repairing Credit 149Alternative Credit 155Bankruptcies and Credit 156Subprime Mortgage Loans 158Chapter 7 Closing Costs: What They are and How to Negotiate Them 161Appraisal 162Credit Report165Application Fee 165Tax Service 166Flood Certificate 167Lender Fees 167Mortgage Broker Fees 168Settlement or Closing Fee 168Title Insurance 169Document Fees 170HOA Fees 171Attorney Fees 171Courier Fees 172Government Fees 172Prepaid and Nonprepaid Items 174Good-Faith Estimate 175Using the Annual Percentage Rate to Compare Lenders 179Negotiating Closing Costs 182Fees and Refinancing 184No-Closing Cost Mortgage 185Appendix: Monthly Payment Schedules 187Glossary 193Index 221
