Financing a Carlsbad CA area condominium should be a fairly straightforward process. Besides maintaining your credit, having enough income and job stability, and a suitable down payment, you might normally assume that the Carlsbad CA area condo approval process should be a simple one. Not so fast!
Lenders Consider Many Factors Before Agreeing to Loan Money for a Carlsbad CA Condo
Condominium, by definition, is one of a group of housing units where each homeowner owns their individual unit space, and all the dwellings share ownership of areas of common use. By obtaining financing, lenders will consider many factors regarding the complex before agreeing to loan money.
For example, and without getting into the specific criteria of each loan product, some banks will want to know the ratio of owners to tenants. In our area this number is currently at 50% owner to tenant. If this number is below 50%, it doesn't matter that all other credit factors are met, you will not get financing.
If you are a veteran seeking VA financing or a home buyer seeking an FHA loan, Carlsbad CA condominiums needs to appear on an approval list by each of these agencies. If so, and you meet all of the other loan criteria then it should be a "GO" for your loan.
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VA and FHA Carlsbad Condominium Approval Process
Don't be discouraged if the Carlsbad condo you have chosen does not appear on the approval list. VA and FHA has an approval process to submit specific documents for approval consideration. These documents are; and not limited to, HOA financial documents, CC&R's (covenant, conditions, and restrictions), association meeting minutes, et al. Many banks and lenders offer this service, but expect to pay an additional fee for this service.
Why is this critical for a Carlsbad area condo complex? In the coastal area cities, and not just in Carlsbad, condominium complexes come in various sizes- especially near the coast where land is at a premium and because it's cool, convenient, and highly desirable to be near the beach.
Many of these Carlsbad area condominium complexes are smaller. Many of these homes are second homes that people enjoy in the summer and rent out when they are not vacationing. Consider a four-unit complex where three owners live out of the area most of the time and one owner is a full time resident. This would certainly affect your ability to obtain financing.
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The smaller Carlsbad area condominium complexes are not well represented on the FHA or VA approval lists because a precedent with approval applications has not yet been set with these agencies. This is my conjecture, but these homes turnover infrequently. Many owners are thinking- why would I want to sell my Carlsbad area condominium near the beautiful ocean?
Don't be disappointed! Before purchasing a Carlsbad area condominum tell your agent what type of financing options you qualify for and have them determine the occupancy ratios and whether the complex is approved by FHA or VA. Doing so first hand will allow for proper planning, coordination, and timing.
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