Buying a North Atlanta Condo: What You Need to Know About Financing

financing your Marietta condoWhile home financing in general has relaxed quite a bit in the last few years, condo financing is one area that has actually become more restrictive. If you are searching condos for sale in Marietta or elsewhere in north Atlanta, read on to learn what you need to know about financing before you make an offer.

How is condo financing different than financing a single family home?

Part of the challenge in financing a condo purchase is due to the very nature of condos. A condo is basically an apartment or housing unit that you own rather than rent, and for which the common areas are administered by an association of owners. For example, each condo owner is responsible for the maintenance and repair of his or her own unit, but exterior areas-the hallways, stairs, elevators, pools, tennis courts, etc.- are maintained and repaired by the condo association to which all owners in the development pay dues.

While the value of your single-family, free-standing home can be greatly affected by the surrounding homes and neighborhood upkeep, the value of a condo is even more intimately tied to the value of the entire development as a whole. Therefore, lenders must ensure that both the buyer and the condominium complex are qualified for financing.

How do lenders decide whether or not to finance your condo purchase?

The lender will decide whether or not to finance your purchase in a particular condominium complex based on two documents.

  • Condo questionaire– A 20-25 question document assessing the financial stability of the complex.
  • Financial statements– These statements include the condo association’s balance sheet, as well as profit and loss statements.

Why is it harder to get condo financing now?

Regulations have recently changed, making condo financing even harder to get. Lenders must now verify that the condo association invests 10% of dues back into a reserve account, to be used for community improvements and emergency repairs. However, this change has not been widely known, and many condo associations are being caught unprepared, not realizing that their reserves are inadequate and preventing the sale of condos in their otherwise thriving developments.

While buying a condo may be a little more complicated than buying a single family home, having experienced Realtors on your side can make all the difference. Contact Barry Wolfert and Lisa Wrenn today to get started and find the Marietta real estate that is right for you.

Photo by Stuart Miles via FreeDigitalPhotos.net