Regardless of the stage of your life or personal goals, everyone has a dream home in mind. Some yearn for a large home with several rooms, while others envision a small, cozy cottage. Condos are another popular type of family home, which are similar to an apartment but much larger. In order to obtain the condo of your dreams, there are financial steps to take and things to understand about the process.
Why Buy a Condo?
A condo, formally called a condominium, is a form of ownership where some are privately owned and some are owned collectively. For most condos, this means that individuals own the condo while they collectively own the amenities, such as a gym or a pool. This collective ownership is a great benefit of financing a condo, although the percentage within each complex can determine whether you are able to obtain a FHA-approved loan.
Where Should You Look?
To find the condo that is right for you and your family, the search begins much the same as if you were looking for a house or apartment. You may find that you want to stay in the area, or find yourself moving to Atlanta or another major city. Ask for suggestions among friends, or a local realtor. It may be more beneficial to ask a realtor because they will help you understand what you can afford and what to expect from the loan process to obtain the funding for your new home.
Also, make sure that you find a financial institution you can trust with a condo loan. Because a condo typically costs less than the typical single-family home, the down payment is lower as well. However, there are specifics that apply to a condo loan but not apply to the typical home loan. Understanding the basic rules of a condo loan and what is required for a condo loan to be approved is crucial.
The Rules of a Condo Loan
There are a few rules that differ from routine single-family home loans to condo loans. The Federal Housing Association requires potential buyers to find their new home from a list of approved condominium complexes. If the preferred condo is not on this list, other means of funding will be necessary. A complex also needs at least 51% ownership to show that it is well taken care of, and people are not simply renting. Banks will have their own rules for lending to potential condo owners, and be sure to research the appropriate insurance coverage.
When you take ownership ina condo complex, you must sign an agreement that also includes rules that apply to a typical home loan. This separate agreement created for a condo will outline the guidelines and regulations for the use and governance of the condo complex. However, there are no spot reviews on condo complexes, even for those not on the FHA list.
Finding a New Home
It can be an overwhelming process to finance your first home. Whether you want a cabin in a rural area or a sleek condo in a busy city, you have the right to understand the strict process that begins with a decision and ends with owning your first home. Grow your family, find a job in a new city, and start a new life.
Stephanie Green is an influencer marketing pro with brownboxbranding.com who is passionate about building authentic relationships and helping businesses connect with their ideal online audience. She keeps her finger on the pulse of the ever-evolving digital marketing world by writing on the latest marketing advancements and focuses on developing customized blogger outreach plans based on industry and competition. She also loves covering hard money loan related topics.