5 Things you should know about financing a condo

5 THINGS
YOU SHOULD KNOW
ABOUT FINANCING A
CONDO
Jackie Woodward // Mortgage Broker // TMG
Visit: www.mortgagegirl.ca // Phone: 780.433.8412 // Email: info@mortgagegirl.ca

5
THINGS
YOU
SHOULD
KNOW
ABOUT
FINANCING
A
CONDO

A condo or condominium is one of a group of housing units where each
homeowner owns their individual unit space and all the dwellings share
ownership of the common areas. Condos can include high-rise and
low-rise apartment units, townhomes and some duplexes depending on
how the title is registered.
The biggest difference between a condo and a house is if you buy a
condo you will not own a specific plot of land. Instead, you own a unit in
a building on a plot of land. As well, instead of the homeowner making
all of the decisions about their home, with condominium ownership a
condo board that is comprised of unit owners makes decisions about
the building together.


5
THINGS
YOU
SHOULD
KNOW
ABOUT
FINANCING
A
CONDO

There are many items you should be aware of before buying a condo,
in my opinion the 5 most important ones from a financing perspective
are included in these slides.
As lenders condo guidelines vary, it is important your mortgage
professional knows the condo details so they can place you with a
lender who fits your mortgage needs.
Your realtor can give you more information about the condo purchase
process, I will only touch on the condo details that can also affect your
mortgage financing options.


5
THINGS
YOU
SHOULD
KNOW
ABOUT
FINANCING
A
CONDO

1. Condo Fees

you
are
responsible
for
the
repairs
and
maintenance
of
your
personal

property
and
surrounding
land
when
you
own
a
house
however
it
is
not
the

same
with
a
condo.

As
you
own
the
unit
and
the
common
areas
are
shared
you
pay
a
monthly

condo
fee
based
on
the
size
of
your
unit
and
a
porKon
of
those
funds
are

used
for
maintenance
and
repairs
of
the
common
areas
among
other
things.

You
will
be
personally
responsible
for
some
of
the
costs
relaKng
to
your

individually
owned
unit
though
there
will
be
some
excepKons
where
condo

fees
will
be
used
to
cover
repairs
related
to
the
building
even
if
it’s
in
your

personally
owned
unit.

Condo
fees
are
calculated
into
your
mortgage
qualifying
ra4os.


5
THINGS
YOU
SHOULD
KNOW
ABOUT
FINANCING
A
CONDO

2. Age Restrictions
Some
condo
complexes
have
age
restricKons
such
as
no
one
under
age
55
is

allowed
to
live
in
that
complex.
Be
aware
there
are
less
lender
opKons

available
with
the
age
restricted
condo
purchases
and
you
could
be
asked
for

a
larger
downpayment,
or
be
charged
a
higher
interest
rate.


5
THINGS
YOU
SHOULD
KNOW
ABOUT
FINANCING
A
CONDO

3. Square Footage
Lenders
are
being
more
selecKve
about
the
properKes
they
have
in
their

porPolios
these
days
and
some
lenders
even
have
a
minimum
square
footage

requirement
for
condo
purchases.

Ensure
your
desired
property
meets
the
lender
minimum
before
removing

condiKons.


5
THINGS
YOU
SHOULD
KNOW
ABOUT
FINANCING
A
CONDO

4. Renter Population
If
you
are
going
to
owner
occupy
your
new
condo,
ask
how
many
other
units

are
also
owner-‐occupied
as
some
lenders
have
concerns
with
complexes
that

have
a
high
renter
populaKon.


5
THINGS
YOU
SHOULD
KNOW
ABOUT
FINANCING
A
CONDO

5. Condo Documents
THIS
IS
AN
IMPORTANT
ONE!
I
can’t
stress
enough
how
important
the
condo

documents
are
to
you
if
you’re
thinking
of
purchasing
a
condo.

Condo
Document
Review
is
almost
like
a
home
inspecKon,
however,
instead

of
inspecKng
the
home,
you
are
reviewing
the
health
of
the
condo

corporaKon
and
how
it’s
run.

More
lenders
are
asking
for
condo
documents
upfront
as
part
of
the

mortgage
condiKons
as
they
are
looking
for
speciﬁc
details
to
ensure
the

building
and
how
it
operates
meet
their
requirements.


5
THINGS
YOU
SHOULD
KNOW
ABOUT
FINANCING
A
CONDO

5. Condo Documents - CONTINUED
Here
is
a
list
of
what
documents
I
would
like
to
see
if
I
were
buying
a
condo:

MEETING
MINUTES

CONDO
BY-‐LAWS

BUDGET/FINANCIAL
STATEMENTS

ESTOPPEL
CERTIFICATE

Keep
on
sliding
for
more
details
on
the
above
documents
à
à
à


5
THINGS
YOU
SHOULD
KNOW
ABOUT
FINANCING
A
CONDO

Meeting Minutes
These
are
wri[en
accounts
of
all
the
talk
that
went
on
at
the
condo
board

meeKngs.
They
detail
everything
the
board
deals
with
day-‐to-‐day
which

involves
the
building
or
its
occupants.
I
mean
everything!

These
minutes
will
tell
you
what
work
needs
to
be
done
and
do
they
have

enough
funds
on
hand
to
complete
the
work.
If
there
are
not
enough
funds

will
there
be
any
special
levies?
Which
means
each
unit
may
be
required
to

come
up
with
a
large
sum
of
money
to
contribute
to
any
immediately

required
repairs?


5
THINGS
YOU
SHOULD
KNOW
ABOUT
FINANCING
A
CONDO

Condo By-laws
Govern
how
the
unit
occupants
are
allowed
to
act.
This
one
isn’t
as
important

to
lenders
as
it
should
be
to
you.

Make
sure
the
condo
bylaws
don’t
limit
your
lifestyle
as
they
address

restricKons
regarding
pets,
smoking,
renKng
out
etc.


5
THINGS
YOU
SHOULD
KNOW
ABOUT
FINANCING
A
CONDO

Budget/Financial Statements
Lenders
like
to
see
the
most
recent
budget
and
financial
statements
as
this

will
show
how
effecKvely
the
condo
corporaKon
is
managing
the
building

finances.
They
allow
you
to
see
how
your
condo
fees
are
spent
and
how

much
money
the
condo
corporaKon
has
in
their
bank
accounts.


5
THINGS
YOU
SHOULD
KNOW
ABOUT
FINANCING
A
CONDO

Estoppel Certificate
The
lawyer
pulls
this
closer
to
your
possession
date
to
conﬁrm
there
are
no

judgments
or
lawsuits
against
the
condo
corporaKon
that
could
aﬀect
your

new
purchase.


5
THINGS
YOU
SHOULD
KNOW
ABOUT
FINANCING
A
CONDO

I
hope
this
didn’t
scare
you
off
as
I
believe
condos
are
a
great
opKon
for
many

homebuyers
as
they
can
be
quite
affordable
and
low-‐maintenance.

If
I
can
stress
one
thing
before
buying
a
condo,
it’s
to
get
a
professional’s

help!
This
could
be
a
realtor
or
your
lawyer
who
can

help
you
with
the

purchase
and
all
of
the
addiKonal
condiKons
involved
when
buying
a
condo.

From
a
financing
perspecKve,
just
be
upfront
and
advise
your
mortgage

professional
ahead
of
Kme
that
you
are
thinking
of
buying
a
condo
so
we
can

structure
your
pre-‐approval
effecKvely.


5
THINGS
YOU
SHOULD
KNOW
ABOUT
FINANCING
A
CONDO

Looking for more articles about condos?
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