Are Condos a Good Investment?
The real estate crash of 2007 has left many developer owned condos empty. In an effort to fill empty units, many developers have reduced prices in an effort to attract buyers. These affordable condos are very tempting for first time homebuyers or current homeowners looking to make some extra cash. Before buying, consider the fine print that comes along with owning a condo:
Monthly fees for condos can range from hundreds to thousands of dollars. If you’re looking to buy a condo as an investment property, program guidelines require a substantial down payment (in most states at least 25%). With a hefty down payment and high monthly fees, there is little room for cash flow.
Conversely, for first time home buyers, if you don’t put more than 20%, you will be hit with mortgage insurance fees. Monthly mortgage insurance and condo fees add up to a substantial amount owed, that is in no way decreasing your principal balance.
Fannie Mae and Freddie Mac have issued guidelines affecting an association’s ability to refinance, depending on its amount of owner occupied condos. Due to this, many associations are putting restrictions on how many condos are allowed to be rented. Down the road, you may be subject to losing your ability to rent your condo.
While many areas, such as downtown Chicago, are prime condo locations, do your research on the association before making a purchase. Condos can lead to a solid return, but can sometimes lead to a loss. If you are current condo owner, now is still a good time to refinance, as rates are still low. United Home Loans is licensed to provide Illinois mortgages, as well as mortgage loans in Michigan, Minnesota and Wisconsin and is very familiar with the condo approval process and the ins and outs of refinancing condos.
Illinois Mortgage Rates
IL 30 Year Fixed mortgage as of March 13, 2013 3.375%/3.539 APR -1- Point
Please click this link for APR assumptions and more IL mortgage rates
Michigan Mortgage Rates
MI 30 Year Fixed mortgage as of March 13, 2013 3.375%/3.539 APR -1- Point
Please click this link for APR assumptions and more MI mortgage rates
Minnesota Mortgage Rates
MN 30 Year Fixed mortgage as of March 13, 2013 3.375%/3.539 APR -1- Point
Please click this link
for APR assumptions and more MN mortgage rates
Wisconsin Mortgage Rates
WI 30 Year Fixed mortgage as of March 13, 2013 3.375%/3.539 APR -1- Point
Please click this link for APR assumptions and more WI mortgage rates