As anyone with good credit trying to finance a resort condo will tell you, lending doesn’t make a whole lot of sense. Whether or not a buyer gets a conventional loan depends on the condo development–not the borrower. As a broker who works with a lot of buyers, it can be a challenge to find the right lender to match with a borrower. Underwriters can’t even agree how to classify properties so sometimes it takes making calls to several lenders to find the right one. Read here.
There was a great article in last week’s WSJ about lending. Here are the main points:
- Check the condo development’s delinquency schedule to make sure there aren’t more than 15% of homeowners behind on HOA dues.
- Properties with a front desk and nightly rentals are difficult to finance conventionally.
- Use alternative financing for properties classified as condotels. Portfolio loans from local banks, private loans, and using home equity from a primary residence are all good options.
Here in Steamboat, there is a local lender offering a 7 year ARM at 3.65% for hard-to-finance condo developments. These can be jumbo loans. With interest rates and real estate prices so low and remaining inventory decreasing, more buyers think now is the time to buy.
To discuss whether it’s a good time for you to be buying or selling a condo in Steamboat, please call us at 970.819.6372.