Buying a condo or townhouse is generally more difficult than buying other types of homes. Many banks are hesitant to lend against townhomes and condos because home prices are failing in many parts of the US. Even government- supported lenders like Freddi Mac and Fannie Mae only buy mortgages tied to townhomes and condos that meet rigid conditions. Cash buyers are basically able to purchase such homes at below market price due to these difficulties in finding finances for them.
Start by managing your funds. If you want to purchase a condo or townhome in Purcellville Virginia, first determine how much you can commit to a home purchase. If you’re buying a home for the first time, you can withdraw up to $10,000 from your Individual Retirement Account as permitted by the Internal Revenue Service. Can you buy a home outright with funds from your IRA and other accounts? How much can you spend for down payment and closing costs?
Contact local lenders and inquire about the condo or townhome loans you can avail of. If condos do not meet Fannie Mae or Freddie Mac standards (nonwarrantable condos) some banks will not lend against them. These banks require 20% to 50% for down payment. When you’ve found a lender that offers the most flexible terms, go for it.
Present your bank statement for the last two months and your payslips for the last month along with your ID and Social Security number. Discuss with the loan officer about your capacity to pay for the down payment and closing costs. Request a pre- approval letter from the lender.
Get a good real estate agent and shop around for a condo or townhouse. Know about homeowners association fees. You’ll be paying them in addition to your mortgage. Can you comply with homeowners association rules? Request for a copy of the handbook to be informed and sure. Choose the condo or townhouse you most prefer. With the help of your real estate agent, agree on a purchase price.
Forward the purchase contract and the homeowners association insurance policy to your lender. If only warrantable condos are lent against by your lender, present a completed condo questionnaire signed by the seller indicating that the condo is eligible for conventional financing. Complete the purchase with a loan closing.
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