Condo Vs. Townhouse: Get To Know Your Loan Choices and Understand The Different Ways Of Obtaining A Loan Either via VA or FHA Today

You can enjoy “turn-key” living in a condo or, depending on services offered by your HOA, a townhouse. That means you can leave and lock the door and not worry about yard maintenance or, potentially home security. The two types of properties do have differences which can affect your choice of home loans, as well as pricing and overall property cost.

Thinking of buying a Condo or a Townhouse anytime soon? Let us help you determine which property is right for you by getting to know the pros and cons

When you own a townhome, you are usually responsible for maintenance inside your home and outside the home. The biggest difference between a townhome and a condo is that when you own a townhome, you own the land it sits on. 

When you own a condominium, you do not own the land that it sits on. It’s obvious this is true for condos that are part of high-rise apartment-style buildings. With a condo, you own everything from the walls inward. Depending on your homeowner’s association, you may or may not be responsible for maintaining the interior of your condo.

How your choice of property as a buyer affects your eligibility for financing options such as VA, FHA home loans, or other types of financing in California right now

Property ownership affects how you get home loans. In order to get a VA or an FHA loan to buy a condo, the entire complex must be eligible for and approved for VA or FHA financing. Loans for condominiums can be complex, and can involve more underwriting steps than loans for single-family residences or townhomes.

Townhomes include ownership of land, and even if they’re part of a homeowner’s association or planned unit development (PUD), they can be eligible for a VA or FHA loan without an additional approval process.

Condominiums also have an additional hurdle that prospective owners seeking a mortgage could potentially face. A condo can be identified as “non-warrantable,” which means that it isn’t meeting conventional loan guidelines as established by Fannie Mae or Freddie Mac, the two national home mortgage buying corporations. 

With both a townhome and a condominium, your purchase price and home mortgage payment aren’t the only costs you’ll need to pay each month. Nearly all townhomes and condominiums have homeowners’ associations. The associations provide amenities, and can maintain streets, landscaping, and offer security services, including gates, guards, and other forms of security. Your monthly HOA fees are counted as part of your debt-to-income ratio when you are applying for a home loan to buy a condominium or a townhouse.

Sources

Headline scores 74 on Sharethrough now – I used basic knowledge and the original article to answer key questions.

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Have You Ever Wondered If Now Is The Best Time To Start Using The Equity In Your Home For Your Benefit?

Have you been thinking about using the equity in your home to invest, pay off higher interest credit card debt, or pay for education or an experience you’ve always wanted, like a dream vacation? 2020 could be the year to take this step, because interest rates on home equity loans are expected to stay at low levels.

If you are 50% optimistic, can you utilize equity in your home for an investment in the present market conditions?

If you’re confident that your investment opportunity will pay more interest than your home equity loan will cost, then of course you can use the equity in your home to fund an investment. You shouldn’t take money out of the equity in your home if you’re not confident that the investment opportunity will pay enough in interest, but if you’ve built up significant equity in your home’s value, you can investigate opportunities for lower-interest home equity loans.

With the new normal we have today, is it possible to pay off a debt with a high annual percentage rate over a home equity loan or through a line of credit?

You can use a home equity loan (HEL) or home equity line of credit (HELOC) any way you choose. With the low interest rate forecasts for 2020, if you’ve paying a credit card bill with a high rate of interest, or even student loans at higher interest rates, it’s a smart financial choice to use a HEL or HELOC to pay off these debts. You could save hundreds, or even thousands of dollars, by paying off a high interest debt through a home equity loan.

Is it beneficial to utilize the equity in your home to pay for an experience or invest in yourself?

More people these days are interested in experiences that produce memories that can last a lifetime than in buying more things. If you’ve always wanted to visit the Galapagos islands, climb Mt. Everest, or visit the great museums of Europe, you could put the equity in your home to good use and pay for these unforgettable experiences. With low interest rates on home equity loans forecast for the next year, it’s much more affordable to use a home equity loan to pay for these experiences than it is to charge them on a high-interest credit card.

Home equity loans are secured by the equity in your home, so you should consider these loans carefully before you take this step. By working with a qualified home mortgage and home equity loan professional, you can decide which amount you would like to borrow, and which loan programs are best for you.

Sources

https://www.lendingtree.com/home/home-equity/home-equity-investment/
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Discover The Meaning of Real Estate Secret Words For Instance: Fannie Mae, Freddie, Conforming Loans And So On Today

If you’re looking for a new home to buy or investigating home mortgage loan choices, you’ve probably run into some friendly, upbeat people who want to help you achieve your home ownership dreams or maximize the value of your home buying potential. However, some of these people sure talk funny! The real estate industry does have its own lingo. Just like any industry, sometimes the pros forget that everyone doesn’t know every single specialized term or abbreviation. So, we thought we’d put together a short list of some common terms you’ll hear, and what they stand for.

  • Conforming Loan: A conforming loan is a mortgage that fits Fannie Mae and Freddie Mac (see below) guidelines for the size of loan and loan underwriting criteria. In November 2019, the FHFA (Federal Housing Finance Agency) announced that the maximum 2020 conforming loan limit for a single-family house would be $510,400.
  • Conventional loan: A conventional loan is a home mortgage that isn’t provided through or guaranteed by a government organization. So, a mortgage that is offered by a private lender or a bank/credit union that isn’t a VA, USDA, FHA, or other government sponsored loan is a “conventional” mortgage.
  • Escrow: Escrow is an unusual word, but it just stands for the third party and time period where the money and contracts in a real estate transaction are verified and the property title is transferred.
  • Fannie Mae and Freddie Mac: These two people aren’t a married couple. They’re two different home mortgage associations that are chartered by the Federal government. Freddie Mac stands for the Federal Home Loan Mortgage Corporation. Fannie Mae stands for the Federal National Mortgage Association.
  • FHA: FHA stands for the Federal Housing Association, which was established as part of “New Deal” programs in the 1930s, and is part of the U.S. Department of Housing and Urban Development. 

There are a lot of other specialized terms in the real estate and home mortgage industry. One of the advantages of working with an RE and mortgage professional is their ability to explain these terms to you, so you can understand what your choices are in homes to buy and loans that you can qualify for.

Sources

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