If you are buying or refinancing a condo with less than 25% equity, you may have already felt the pain.  Lenders have created another way of covering their backs.  Condo mortgages carry at least a 3/4% penalty in closing costs.  Borrowing $200,000 and you will pay an extra $1500. 

If you know this going into the buying negotiations, make sure you negotiate that the seller will have to pay this amount toward your closing costs.  It should not matter if you are putting down over 25% or under 25%, this is a lenders estimate of the additional risk that a condo carries.  If you don't pay it now, you may have to pay it when you sell.

If you are refinancing, factor this costs into the breakeven analysis you use to decide if a refinance is worth it.

Have a nice day!