Choosing Financial Freedom

Avoiding Mistakes With Your First Condo Mortgage Loan

6 February 2019

Aubree Mccoy

Buying a place for the very first time as an adult brings with it a number of tasks that you may not be used to. This is especially true with waterfront and condo purchases; while parents or friends might have experience buying standalone residential houses, there are still issues unique to condo purchases that your acquaintances and family can't prepare you for. If you're seeking a single condo unit on the water, it's even more important that you recognize and deal with these waterfront condo mortgage issues.

Condo Developments Must Be Approved, Too

One surprising aspect of condo purchases is knowing that not only you need approval, but the condo development you're buying into requires mortgage approval, too. That's because you'll be buying one unit of many, and what happens in the other units could affect your own space. Any lender you're thinking about will ask questions about the development, including:

• How many units are occupied by the people who own them?
• How much space is used for commercial endeavors?
• What kind of insurance does the development carry?

Some mortgage lenders even publish a list of approved developments so that you can select from among them and save yourself some stress.

Waterfront Property Competition Means You Should Seek Financing Early

You may be happy to just peruse units and wait until a particular property resonates with you before placing any offers. However, realize that waterfront condos are in high demand; if you place an offer without already being pre-approved for a mortgage, owners will be less likely to accept your offer when faced with other buyers who have already sought their financing. Don't drag your feet; have a pre-approval in hand before you speak to any owners.

Other Expenses and Expenditures Could Affect Loan

Even if you're able to pay a substantial downpayment and find yourself pre-approved for a specific amount during your waterfront condo search, remember that other expenses are important to your final loan approval. For example, if you find a condo development with very high homeowner association (HOA) fees, a lender may show concern about your ability to afford both the fees and the mortgage. If a condo unit comes with a boat slip and you're about to buy a small boat, know that the mortgage lender might have reservations about that.

Ultimately, you should get the waterfront condo you most like. Remaining aware of relevant mortgage issues and avoiding mistakes will make that an easier thing to do. For more information, reach out to home mortgage services. 

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