Finance A Condo

You’ve found your favorite condominium to purchase.  Now you need financing.  Where do you go to finance a condo? To finance a condo in today’s market it can be a bit of a challenge, but certainly not impossible.  Over 30,000 condos closed and were financed in the Chicago area in 2008.  Someone was out there financing condos.

Financing companies generally look for a few things when financing a condo. They start out with checking your credit score.  Each month all of your credit card companies, your auto loans, etc. will report to a credit bureau rating you on how you’re paying off your debt.  The credit agencies take all this information and create a “credit score” for you.  Banks and lending institutions take this score to heart and many times will not lend to a person if they have a score even one below what is required.  It’s all black & white many times. 

Most loans can get done with a credit score of 580 or above.  People that are in the range of 700 or above are considered excellent candidates to give a loan to.  The next step is your down payment.  How much money will be paid cash for the condo and how much of the money will be financed.  When financing a condo, the banks will look at many factors, but the more down payment you have, the better.  If the condo you’re trying to purchase a condo for $200,000, typically you’ll need 5% of that in cash or $10,000.  If you were to put 20% down or $ 40,000 the banks risk position is much less and it makes doing the loan almost a slam dunk.

So to summarize, financing a condo comes down to having a good credit score and having a significant down payment. Even with this as the main criteria, if you have a blemished credit score and zero dollars, there’s always ways to find a way to purchase a condo.  For the tenant that wants to buy his or her condo but does not have a down payment, there are rent-to-own programs out there that allow you to utilize some of the rent payment toward a down payment.  Secondly, the person without a down payment can borrow the money from mom or an investor.  In the end, if you really want to finance a condo, it can be done.  You just have to want it bad enough.

For more information on financing condos, you can for to “FinanceACondo.com”.  They specialize in financing condos throughout the United States.