Florida Condo Financing – Learn More about What’s Required to Finance a Condo
Are you planning on financing a condo in the State of Florida? If so, you’ve come to the right place.
In this article will share with you some tips that you need to know about Florida condo financing so that you will be prepared to purchase a condo in the State of Florida since buying a condo here is much different than purchasing a single-family home or condo elsewhere in the United States.
Is The Condo Approved for A Florida Mortgage Transaction?
The first thing that you need to find out before buying a condominium in the state of Florida is if that condo has been improved by a condo association and is eligible for financing in Florida.
If the condo is approved for financing in the state of Florida, and you plan on purchasing that condominium for your primary residence, you may be able to purchase a condominium with a down payment that’s as low as 3.5% thanks to an FHA loan.
Let’s say that you don’t plan on buying a condo with an FHA loan, or the condo has not been approved by a lender like Fannie Mae, in this case, the minimum down payment to purchase a condo in Florida is a 25%.
Are you planning on buying the condo for a second home or investment property? If so, the same rule applies, if you finance that purchase, you will need to put down a down payment of at least 10% as well.
What Type of Mortgage Loan Should You Choose?
When buying a condo in Florida you will have a variety of options to choose from including 15-year and 30-year mortgage loans.
Thanks to historically low mortgage interest rates many buyers over the last 5 years have chosen 15-year mortgage loans so they can pay off their mortgages sooner than their friends, family, or co-workers may have in the past.
What Is The Credit Score Required to Purchase a Condo In Florida?
To purchase a Florida condo a minimum credit score of 620 is required. Before getting pre-approved for a mortgage loan, buyers are encouraged to check their credit scores and pay down their debts (if possible) to lower their debt-to-income ratio.
What Is a Limited Review?
If you’ve purchased a primary residence in Florida or elsewhere in the United States, you will be familiar with the appraisal process.
When purchasing a condo, you may need to go through a limited review if your condo has not been approved by Fannie Mae.
The Limited Review process involves answering key questions and thoroughly researching the condo for potential litigation issues which the buyer may face should their mortgage loan application be approved.
What If The Condo Is Non-Warrantable?
During the Limited Review process of buying a condo in Florida, you may find that the condo you want to buy has been deemed non-warrantable. This means that the condo wasn’t approved by financing from Fannie Mae or Freddie Mac.
The good news is that in spite of it being non-warrantable, you still have other options available to you including:
- Combo Mortgage – You could get a regular, conventional mortgage loan (up to 75%) and then a second smaller mortgage loan for 15% at the same time.
- Alternative Lenders – Search for a lender who offer portfolio loans that won’t be sold to either Freddie Mac or Fannie Mae. These loans typically require a minimum of 30% down but the good news is that the underwriter will in most cases look at a borrower’s financial picture instead of just reviewing the details for the condo project.
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There’s never been a better time to apply for a mortgage loan in Florida, contact us today by calling 954-439-0568 or connect with us through our website