Before Buying a Condo

June 18, 2009
Matt Isleib

 

Before you take the plunge to purchase a condo you should take a look at LoanClassrooms list of important questions that you need to ask and be aware of before making any offers to buy a condominium.

·         If you are getting FHA financing not all condo’s are FHA approved. Make sure you know what condominium complexes are FHA approved before you make any offers.

·         In today’s mortgage market smaller condo complexes are harder to finance. Typically complexes less than eight units are considered “small complexes”

·         Ask what the investor concentration is, most lenders will not lend if a complex has a lot of units that are investment properties. If you are an investor you need to check the opposite. Make sure that you can rent your unit out as an investment property.

·         Who runs the condo association? Is it a management company? Are there appointed board members?

·         Is the condo a conversion? What that means is the condo a conversion of an apartment complex? Lenders these days are strict with condominiums this is a sticky one

·         How many units in the complex are un-sold? If you are buying a new construction condo this is for sure an important question

·         If the condo is an established project what kind of shape is the condominiums reserve fund in?

·         Take a look at the master insurance policy to see what exactly is covered under their policy and how much

·         Are there any “special assessments up-coming”? The common fees per month may be manageable now but a lump sum assessment later may be a problem