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Q&A: Mortgage Insurance & Condo Docs

By
Real Estate Agent with Karla Casey (BIC), List Sotheby's International Realty, Hawaii RB-17901

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!

Man with Question Mark

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. 

 

Posted by

Karla Casey, Principal Broker, Casey & Associates
Representing the Islands of Oahu (Honolulu) and Maui

   

Eric Peltier
Eric Peltier - Premier Mortgage Group - Boulder Colorado - Boulder, CO
Mortgage Lender in Boulder CO

FHA does have Mortgage Insurance.  Quite a hefty amount, too.

PS - you have "bands" instead of "banks"

Mar 15, 2012 11:45 AM
Karla Casey
Karla Casey (BIC), List Sotheby's International Realty, Hawaii - Honolulu, HI

Yes I understand, but isn't it lumped into the loan differently than a regularly conventional loan that has mortgage insurance? I'd like to become more knowledgeable in this so if you wouldn't mind responding with more info on how mortgage insurance differs in an FHA 3.5% down loan and a conventional loan with less than 20% down, I'd greatly appreciate it!

 

Thank you for your response! :)

Mar 15, 2012 12:29 PM