How to get financing in such a difficult loan environment for Miami condos
These days banks have become very stringent on financing options for Miami condos. Due to new Fannie Mae and Freddie Mac guidelines, coupled with the shaky banks, most Miami condo buildings now fail to meet the requirements required for a bank to offer a loan for the purchase of any unit in that building. So even if you have solid credit, solid employment and want to put 20% down, the bank will say no. Believe it!
So how do you get around this? First, before we get into the details, let's review why most people are wanting to purchase a home to begin with to see why it is worth going through this mess to purchase a property:
- take advantage of the $8000 tax credit that expires this year (end of 2009)
- receive tax deductions on his income tax,
- build equity on principal through monthly payments,
- build equity through long-term appreciation,
- have the stability and comfort of owning his own place
To make this happen, I would expect we need to:
- determine what your credit score is now to see what options will be available to you. Did you know that FHA loans do not require good credit, have lower rates and lower down payment requirements than most conventional loans?
- determine the maximum you have from your own personal funds for down payment and closing costs, and how much can be gifted to you through family/friends if any
- will anyone else be able to be co-mortgagor? If you have someone you trust that has good income and low debt, that may help increase your purchasing power
Some things you need to know about the current Miami market:
- Due to very stringent new loan policies most larger condo buildings in Miami do not qualify for any loans unless the down payment is 35%+. It does not matter if the individual can qualify, the bank will not give loans in specific buildings.
- This leaves the option of purchasing in a smaller condo building, an older one that has more stability (there are a few good ones in South Brickell for example), a townhouse or a single family home. None of these are out of anyone's reach, as the Miami area has become extremely affordable. It is just a matter of adding up all the info we have above to come up with what purchasing power we have. Then, we need to look at your preferences and come up with scenarios.
I look forward to hearing from you.