Getting a Mortgage for a Chicago Condominium
If you are purchasing a condo in the greater Chicago market, there are a few things you’ll need to understand as it relates to getting approved for a mortgage. In addition to the typical lender requirements regarding your income, assets and credit history, the condominium you are purchasing must also go through a similar approval process.
Banks and mortgage lenders want to evaluate the condominium for overall financial strength and sound management. Here are some of the things that lenders look for when reviewing a condominium:
- Percentage of investor units
If a high percentage of the condominium owners rent their unit to tenants, lenders view that as an additional layer of risk since those people may not have the same pride of ownership as an owner that will use the unit as their primary residence.
Is the condominium involved in any type of litigation? A lawsuit could result in a financial judgement that must be paid for by all of the condominium owners.
- Association dues
If a large percentage of the unit owners are delinquent on their monthly association dues, this could also result in an additional financial burden for a purchaser.
- Project insurance
Does the condominium association carry sufficient building and property insurance? If a building is under-insured and suffers significant damage or if it is destroyed, everyone loses including the owner.
- Financial reserves
Does the building set aside sufficient funds for reserves for unexpected maintenance or the repair of major building components such as HVAC equipment, windows, roof repair etc.?
If you are looking to purchase a condo in the Chicago market, you should ask these questions prior to making an offer on your new home. United Home Loans is an expert on the condominium lending process and can walk you through the questions you need answers to when making a buying decision.