Financial institutions are making it hard on San Diego Condominium Buyers , the main 2 factors in which a mortgage lender could quite possibly refuse to finance a condominium are litigation in addition to low owner occupancy levels Below 50%. This applies to conventional loans as well as government back loans including FHA
Condo Litigation would mean a HOA Home Owners Association of the building or condominium complex has filed a “Defect Lawsuit”. The lawsuit is generally brought against the developer usually within the first 10 year span of construction. This litigation could relate to flaws with particular units, stages of the development and/or the common areas. It is usually during the time span connected with the litigation procedure that Mortgage lenders may decline to provide loans on the property.
Prices throughout the San Diego Condo complex or building usually fall thanks to the lack of qualified buyers Cash Buyers and lender financing. It is certainly not unusual to observe Investors paying cash come in and buy up litigated property for much less.
Many if not all Lenders will need a document known as a Condo Certification , the file that will states details regarding the actual status of the particular condominium building . This is the document the banks will look at in order to establish the current status involving any litigation, owner occupancy and other issues that will may cause concern to the Lender.
Based upon on the type of litigation and areas regarding the complex that’s involved , buying within a litigated complex can easily result in a very sizable discount on market value. Certainly , there are a several ways of getting around litigation such as paying cash, or maybe paying a significant down payment or even paying a higher interest rate.
Working with an qualified Real estate agent is going to help keep you up-to-date on which property is in litigation and also which has a low owner occupancy level saving you a lot of time and energy in the buying process.
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