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Ask the expert: We are retiring and thinking of buying a condo in a building we have long admired. Is this going to be hard to finance?

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Condos can be more difficult to finance than single family homes, but the key to getting a conventional loan is in the building itself.

Remember that when you buy a condo, your mortgage company (and you) are placing trust in the whole building, not just your unit.

For this reason, buildings must meet some standards. Here are a few:

– Common areas must be completely finished and owned by the unit owners or the Home Owners Association.
– At least 51 percent of all the units must be owner-occupied or second homes.
– The building must maintain an adequate budget to run the property.
-At least 90 percent of the units must be sold and currently owned by unit owners.
– A single entity can’t own more than a certain percentage of the building.
– Unit owners must be keeping up with their association dues.
– The condo project must be covered by adequate insurance.

If the condominium project is established and known to meet guidelines, and you are a credit worthy borrower, you will probably have little difficulty getting a conventional loan.

Keep in mind that in calculating your debt-to-income ratio for the loan, lenders will count your HOA fees as part of your total monthly expenses.

As usual, you can save on mortgage insurance by putting at least 20 percent down.

When you buy a condo, you are buying into the HOA and you are sacrificing some privacy for convenience. It’s a good idea to take a look at the minutes from the HOA meetings to see the sorts of issues being discussed.

When the building qualifies and you find the property suitable, financing a condo should be much the same as a conventional home.

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