I was recently asked a question regarding mortgage insurance and how condo docs work in an REO/short sale situation. I'd like to share my answer with you all!
Question: How much does a person have to put down to avoid paying mortgage insurance? Also, a Realtor on Maui told me that condo docs run between $350 and $400. As I understand, the banks won't pay for them if it's an REO property and in a short sale the seller pays for them.
Answer: Typically you will have to put 20% down unless you qualify for FHA, then it's 3.5% down. Some REOs and short sales the bank will pay for condo docs.
Hardly ever will the seller pay for them because the sellers is usually selling because they are short on money. Therefore, if you are a buyer in a short sale or REO situation, you should plan in paying both the condo docs and termite inspection which would come to about $800.
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