So what's the skinny on buying a condo? Are there any different procedures, any extra considerations to make? Most definitely! There are many reasons, and pros and cons to buying a condo. If you, or someone you know, is looking to make a condo their new home, read on to find out all that comes along with it.

Why Buy a Condo?

There are many reasons someone might choose to buy a condo over the typical single-family residence. To explain the difference, a private residence is privately owned, whereas with a condo, or condominium, common areas are jointly owned by the other condominium residents.

In markets that are extremely expensive and popular, such as downtown areas, condos tend to be a popular choice, as they are often cheaper than buying a single-family residence. In this way, condos offer many an opportunity to enter and live in a locale they might not otherwise be able to afford. It's a viable alternative to renting an apartment, as when you actually own a condo, you can build equity and often take advantage of tax deductions on the mortgage interest.

Condos tend to be popular among the retired, as a condo community will often provide services specifically catered to them.

Because condos share a common area that is owned by all residents in the building, there is a governing board that oversees how the condominium operates. Before purchasing a condo, it's a good idea to learn as much as you can about how the complex is managed, and any hot issues. Also, there are rules and guidelines set forth in most condominiums, make sure you look into them and are willing to abide.

Pros of Buying a Condo

Location

As stated earlier, many condominiums are built in popular areas and downtowns, so if you want to be in the heart of a city, or within walking distance to many different amenities, a condo might be a good option.

Security

Many condominiums will offer security features such as a buzzer or guard service. Living amongst a group of neighbors also provides a sense of security when you leave for vacation. 

Maintenance

If you're not the kind to work out in the yard, or you're not a know-it-all handyman, welcome to the wonderful world of condos where you don't really have to worry about these chores. Many condominiums hire professional landscapers to maintain the exterior, and if something on the interior breaks they will have someone come fix it. Be careful here though, if you break it yourself through negligence, they may require you to cover the damages.

Amenities

So, since you are the co-owner of all those lovely common areas, what's actually in them? Often they will include tennis courts, swimming pools, a gym and other amenities you might not be able to afford on your own.

Cons of Buying a Condo

No Land Ownership

Unfortunately when you buy a condo, you don't own the land beneath it, but share an interest in it with the other condominium residents.

Fees

It costs money to upkeep those lovely common areas, so as a condominium resident you will be required to pay a monthly fee that goes towards the maintenance and repair of the common areas. So if there's a swimming pool, be sure to hop in every once in a while! There may also be an additional fee tacked on for any larger repairs and renovations.

Community Association

Since you'll be living in a community, with a community board or association that helps to govern it, you might find that the average homeowner doesn't have the same experience as a property manager, leaving the association weak or inefficient.  

There are also rules you'll have to follow called the Covenants, Conditions and Restrictions. Typically these include restrictions on noise levels, renovations, pet ownership, and can go as far as how you landscape your porch/doorstep.

Resale value

The bad news here is that condominiums tend to be very sensitive to market conditions, so although it's hard to believe the market could get any worse right now, if it does, they are usually the first to suffer and the last to recover.  

Condo Loans

Getting a loan to buy your condo is no joke, and can often be tricky as there are specific rules that might make the process difficult.  These rules also vary depending on whether you get FHA or Conventional financing, and then vary from lender to lender.

FHA Loans for Condos

First off, to obtain FHA financing for your condo, it must be listed on HUD's FHA approved condominium list. The FHA has a list of criteria that a condominium project must meet before it can be approved to allow residents to use FHA financing to purchase or refinance a condo. Examples of this criteria include a limit on the total floor space of a condominium building to be used for commercial or nonresidential use; currently the max allowed is 35% of total floor space. Also, 50% of a condo's units may be owned by a single investor or entity, so long as at least 50% of the total units in the project are owned or under contract for purchase by owner-occupants.  No more than 15% of a development's units can be more than 60 days delinquent on condo association dues.

As you can see, these little rules may prove difficult to find a condominium project that allows for FHA financing. Start working off HUD's list so you don't waste your time! If FHA financing isn't going to work, it's time to seek conventional financing.

Conventional Loans for Condos

When it comes to conventional financing it will vary from lender to lender as it will depend on their investor guidelines. Some general criteria can apply however, for example, a lender will find it difficult to finance a loan on a condo in a building that has complex and costly lawsuits against it. The complex must also maintain appropriate insurance such as hazard, liability and flood insurance. They will also look at the percentage of homeowners delinquent on condo association dues.

Purchasing a condo, much like purchasing a home, is a big investment, and there are many considerations to make in terms of lifestyle and financing. If by the sounds of it, a condo may be your best bet as a first time home buyer, go for it, but make sure to research and find out as much as you can about the condo unit you are looking to purchase.

 Is a client ever too young to buy a home? Technically, as long as a person is old enough to sign contractual agreements in your state, they are old enough to purchase a home. Whether they are ready for the responsibility has much more to do with financial maturity than age.

For the fifth year in a row, national mortgage lender New American Funding makes Scotsman Guide Top Mortgage Lenders list. The California-based company was ranked among entries from hundreds of mortgage companies across the country in the following categories:

-Top Overall Volume: #14

- Retail Volume: #11

To view Scotsman Guide’s residential ranking, please visit: http://www.ScotsmanGuide.com/TopLenders2016

Scotsman Guide, the leading resource for mortgage originators, created its 5th annual listing based on loan data from 2016. They ranked each company according to mortgage volume on residential properties that are up to four units and are located within the U.S.

“We’re thrilled Scotsman Guide has again identified New American Funding as one of America’s leading mortgage companies,” said CEO Rick Arvielo. “We work hard to remain progressive and to be a forerunner in the industry; therefore, we count it an honor to be recognized for five years in a row. This accomplishment challenges us to continue stretching to new heights.”

2016 Highlights

Arvielo guided New American Funding through 2016, a year that resulted in record-breaking profitability, which included generating more than $11.7 billion in loan volume and funding more than 40,600 loans. He also expanded the company’s reach to 130+ nationwide locations and 2300+ team members by adding 36 retail branches and more than 1200 employees.

Recent Awards

The company has received several notable accolades for its tremendous growth, which include:

-Inc. 5000 Fastest Growing Companies

-Top Mortgage Companies in America – Mortgage Executive Magazine

-Gold Best in Biz Award – Fastest-Growing Company of the Year

Due to his progressive business approach, Ernst &Young named Arvielo an EY Entrepreneur of the Year™ and inducted him into its EY Hall of Fame; while the American Business Awards? named him a gold Stevie® winner for Executive of the Year. 

Read more at https://www.newamericanfunding.com/about/newsroom/scotsman-guide-ranks-new-american-funding-a-top-mortgage-lender-in-america/#qJey8YACCkK81Dxa.99

 In recent decades, owning real estate has provided millions of people with an opportunity to create and retain personal wealth. For most, their home is their largest asset. That’s why considering homeownership as part of a long-term financial plan—and treating a home as an investment—may make sense.

Here are some key considerations to factor into buying a home and seeing it as an investment.

Rate of Return

In recent years, borrowers have been able to secure home loans at relatively low interest rates, making homeownership more affordable. As the price of their home has risen, many have experienced a positive rate of return.

Mandatory Savings

Since most homes are bought with borrowed money—a mortgage—they represent an automatic savings program of sorts. Each monthly payment adds to the home’s equity- the difference between the mortgage balance owed and what the home is worth. Generally more interest is paid at the beginning of the loan and later, more of each payment goes toward the principal. That means, without any increase in out of pocket expense, more is being contributed to the equity/savings as time goes on.

Ownership Equity vs. Rental Expense

For renters, housing is just another monthly expense. There are no savings unless the rent payment is less than a mortgage payment would be —and you put the difference away. While renting may be appropriate early in your adult life, once you settle into a place, owning typically offers the better long-term financial benefits. Housing expenses are usually predictable with a mortgage, as with a Fixed Rate loan, whereas living in rental property is unstable due to unexpected increases. With a mortgage, you are in control of your expenses – not your landlord.

Tax Advantages

Homeowners with mortgages are typically able to deduct all or most of the interest portion of their monthly payments at tax time. This can trim thousands of dollars from their tax bills over the life of the loan. Depending on local tax laws, any property tax that is paid may also be deductible, while certain home improvements may earn tax credits, further reducing tax bills.

Also, under current tax laws, a home’s appreciation in value is tax deferred. For many homeowners, even after they sell, that gain may be realized without tax consequences.*

Wealth Building

Homeownership has historically provided an accessible steppingstone to personal wealth. Borrowers at various income levels can purchase a sensible home for their situation and generally, over time, the home’s value appreciates and provides the homeowner with equity. As the years go by, this equity builds and can become a substantial portion of a homeowner’s net worth. 

Invest in You

Homeownership provides you more control over your space, allowing for more creative expression and personalization over the place where you reside. Compared to renters, homeowners are happier, healthier and have better self-esteem.

Invest in Your Family

When you buy a home, you have more control of your family’s environment. Not just inside the home, but you can research to find the best schools in the safest areas and then buy in that area. The most desirable areas frequently offer fewer rental living options.

Invest in the Community

Buying a home generally leads to pride in homeownership, allowing a buyer to settle into a community and establish long-term ties in their area. Stronger ties typically mean more interest in the community, more civic involvement and better neighborhoods overall.

With the multitude of benefits to owning a home, it makes sense to look at it and treat it as both a financial and personal well-being investment.

* Borrowers should always discuss any potential deductions with a licensed a tax professional.

Read more at https://www.newamericanfunding.com/blog/should-you-look-at-your-home-as-an-investment/#7rB5lHIWBhFPVpMG.99

Read more at https://www.newamericanfunding.com/blog/new-american-funding-launches-training-program-for-mortgage-professionals/#Kk1gh8Gp4sTWMpEr.99