Archive for April 2019

4 Questions to Ask Yourself Before Investing in Condos

Investing in Condos

Investing in Condos

Condos have been getting a lot of press lately. All this talk might make you wonder if purchasing a condo is the right move for your situation. While there are some exceptions, many condo buyers fall into one of three categories: first time home buyers looking to get into the local market, investors adding to their portfolio of rental properties, and new retirees looking to downsize.

Before you pull the trigger on your condo purchases, make sure you have considered the answers to these important questions.

Question #1: Have you looked into the condo association’s rules and regulations?

While most condo association rules are fairly straightforward, it is important to understand what the building’s residents can and cannot do. For example, some buildings may not be pet-friendly while others might limit the type and size of the plants you can grow on your balcony. Some condos might regulate whether or not you can have welcome mats or if you can hang decorations outside your door.

These rules are in place to prevent neighbors from causing an eyesore. While the intention behind the rules is good, it is important to consider whether or not you personally can live with these rules.

Question #2: What amenities are you looking for?

A condo association can have its downsides, but one of the benefits is that the association often gives its residents access to community amenities. When you are looking at condos in different buildings, consider which amenities you love and which ones you could live without. Examples include a health club, swimming pool, reserved parking, and concierge service. Some luxury condos even offer an optional cleaning and laundry service.

Question #3: Have you budgeted for the HOA fees?

The amenities provided by the condo association are nice, but they are not without their cost. In most cases, higher HOA fees come hand in hand with better amenities. While this is not a deal breaker, make sure that you have included these HOA fees in your budget.

These HOA fees cover maintenance and repairs to the building, helping you even out your monthly and yearly costs. With traditional homeownership, you might have huge unexpected expenses such as a damaged roof or a furnace that goes out. One of the benefits of living in a condo is that these costs are often covered by the HOA fees without any additional costs to the residents. Before moving in, check to make sure that your condo association has a respectable amount of money on reserve to cover any large maintenance items.

Question #4: Is there on-site maintenance?

One of the biggest benefits of living in a condo is that you are not responsible for the maintenance. This can be a huge burden lifted off your shoulders, freeing up your time for other activities. However, if the maintenance team is not on site, this can mean spending a weekend living with plumbing problems or a broken air conditioner. Ask about the maintenance team’s typical response times before buying a condo. You can learn more about the dos and don’ts of condo living by browsing our website.

Buyer’s Guide to Mortgage Pre-Approval

Mortgage application

Mortgage application

Talking to a mortgage lender and getting a pre-approval letter is often the first step towards buying a home. However, it is important that you understand what your pre-approval letter can and cannot do for you. You should also be prepared to show your lender proof of income, assets, and other relevant banking information.

You will need to provide your financial details to receive pre-approval.

The first step towards getting pre-approved for a mortgage is to meet with the lender and discuss your financial history. The lender will need your social security number to pull your credit report. Your credit report will outline your current debts as well as any past delinquencies. While your credit score is not the only relevant factor, a clean credit report can go a long way towards securing a mortgage. If you plan to have a co-borrower on your loan, perhaps a spouse or a parent, the lender will need to pull their credit report as well.

If you do not get pre-approved at your first meeting, do not despair. Working to pay off debts and improve your credit score can go a long way towards meeting the qualifications for pre-approval. You can always try again in a few months after you get your other financial obligations in order.

A pre-approval letter can tell you how much home you can afford.

A pre-approval letter is the best way to narrow down your price range. By going through the pre-approval process, the lender will analyze your financial situation and give you a maximum amount that they feel comfortable lending you. This may or may not be the number that you already had in mind. Many people use mortgage calculators to estimate the size of the loan that they can comfortably afford.

If your pre-approved amount is higher than your target price range, then you know that the homes you have been looking at are well within your budget. If your target price range is higher than your pre-approval amount, you will need to reconsider how much home your family can actually afford.

Your pre-approval letter does not guarantee you a loan.

It is important to note that your pre-approval letter does not guarantee you a specific interest rate or a loan at all. Even after the pre-approval process is complete, the lender can still request additional documentation before approving the final loan. This documentation often includes verification of your assets as well as proof of your family’s income. It is common for lenders to request pay stubs and bank statements before the loan paperwork is completed.

Because of this, your pre-approval letter does not guarantee that the seller will accept your offer. One of the reasons an all-cash offer is so attractive is because, unlike an offer backed by a pre-approval letter, there is no chance that an all-cash offer will fall through at the last minute due to insufficient funding.

However, a pre-approval letter is not worthless. A seller is far more likely to accept an offer backed by a pre-approval letter than an offer without pre-approval from a reputable lender. To learn more about making a solid offer on a home, get in touch with Huntley Realty, email us at homes(at)huntleyrealty(dotted)com or call 847.669.4010.