What are my alternatives to Investment property?
I purchased a Condo in Florida (investment property) at the height of the real estate market. The purchase was made with a friend as a joint owner. As luck would have it, my partner lost her job a couple of years ago and cannot pay her half anymore and is proceeding into bankruptcy.

Obviously, I am liable for the loan and am searching for any alternatives, either short term or long term. The Condo mortgages along with my personal residence mortgage is 48% of my gross pay. At this rate, I’ll eat up my savings within six to nine months. I am current on all payments. The value of the property was financed at 90%, with a mortgage and HELOC. Both are interest only loans. The current value of the property is 72% of the loan amount.
This means the value of the property is currently about 65% of what we paid.

We have been renting the unit as a vacation rental, but only have been able to rent it about 25% of the year. It generates enough income to cover about 20% of the cash outlay. Long term rental prospects are slim.

Any thoughts on how to either keep the property and minimize damage or is foreclosure an option I need to consider down the road? Is a loan modification possible, even on investment property? My credit score is very good at 805, so I guess I would sacrifice that as well.

I’m not looking for an easy way out, I just want to understand all my options.
thanks

Additional Details
The condo is in Panama City and I am working as an engineer in Georgia about 350 miles away. So, a business in the unit is not really an option. I guess another investor is an option. 50% ownership at 25% of the cost. That may work.

The the intent was to rent about 200 days a year, however, the rental market in this area was saturated with new condos, thus only able to rent about 3-4 months a year at best. Additionally, the with the hurricanes several years back, the insurance and property taxes more than doubled, which was not anticipated.

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Check with your mortgage company – they are the only ones that can do a modification. They go by your credit score and not income. There probably will be an application fee.

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this is puzzling; were you expecting to rent it out only 25% of each year or what was your intent?

YOU did not volunteer what your occupation is. OR where you work.

you should immediately–consider putting a biz in the unit–
some 1-5 home occupations.

you should immediately consider finding a new partner and
selling him/her 25-50% of the unit.

other options exist but i need more data from you.

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The best thing to do would be to find someone else to partner up with you…if you have a credit score of 805, do your best to keep that…sadly not a lot of people can boast a score like that. Try to find a way to keep up with the payments…real estate is still the best long term investment.

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What part of Florida is it in? I may be interested in buying it.

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Should I ’short sale’ my condo?
OK, I owe about $127k and because the market crashed, it’s now worth only about 108k. If I were able to sell it at 108k, after closing costs and realtor fees, that puts me in the $25-$30k out of pocket, which I don’t have. I’ve moved out because I got married into a house which I’m renting, so it’s getting tough to carry rent plus that condo mortgage. I am trying to get a renter but because of similar properties the best I could get for rent would still put me about $400 out of pocket each month. Now, I don’t really want to foreclose, but what about a short sale? I know that would still drop my credit, but by how much? I’ve read anytihng from 50-300 points. I won’t be looking to buy regardless for another couple years so maybe some of that could recover. Now I’ve read everything I can about it online, and I’m trying to schedule an appointment with an attorney and a money advisor. Is anyone out there either of these, or have done a short sale yourself, or been in a similar situation? Thank you for any advice!
1 month ago (Tiebreaker)
Additional Details
To answer some questions from the first four responses, the condo is in Rhode Island, and I am still current with my payments.

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Talk to your bank first; be firm with them and tell them to give you in writing a definitive dollar range on the amount they will accept for a short-sale on your condo If they will not send you a document then tell them you will stop making payments on your condo on a specific date unless they send you what they will accept for a short-sale.

If they continue to refuse, and you really are tight on money then foreclose on your property. Ask yourself why don’t you want to foreclose, other than the credit hit? Don’t be afraid of the stigma of foreclosure.

If you choose the foreclosure path, review the laws in your state regarding foreclosures. Make sure to find out if your state is a non-recourse state and/or a anti-deficiency state and what the state laws are regarding property type (single-family -vs- multi-family unit), property value, property size, and property status (primary residence -vs- rental).

Also, find out if your mortgage is really a mortgage or a deed-in-trust. The rules and processes around foreclosure are different for each. Also find if your state does judicial -vs- non-judicial foreclosures.

You may also want to read up about debt cancellation from the Mortgage Forgiveness Debt Relief Act of 2007. This law was extended to December 2012 and excludes any tax penalty that can arise from debt cancellation for short sales, deed-in-lieu, or foreclosures on certain properties. See if your situation fits into this law.

You are not too upside-down on your mortgage compared to most in troubled areas, but if money is tight then do whatever is best for your future financial stability.

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You would need approval from your lender to do a short sale. You would also need to prove that you can no longer afford the condo. Paying rent elsewhere will not likely get you approved.

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if you do rent it out….even though your out of pocket could be 400.00/month…could hold on for another year? the housing market will improve…you did not say where you lived but the florida and california markets took a dramatic swing down…most experts will are predicting that the market will improved dramatically giving you the chance at break even…if your in michigan…then i would do a short sale

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yes short sale if your lender will allow it. It will prohibit you from mortgage loans for about 24 months.

If you are not yet delinquent on loan your lender will be surprised you asked and will probably say no.

If already 90 days past due a short sale will hurt score much more than now. If current then about a 100 points.

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Can I negotiate to be allowed to rent my condo.?
I have my condo on the market now for 4 months with no luck of selling it. My husband and I were renting it to a friend of ours, but we received a letter from the condo association stating that we were not in compliance with the by-laws which state we can’t have anyone live there that is NOT immediate family. We have a home now and a hefty mortgage, the condo mortgage and association fee is $875 per month that we can’t afford much longer. We want to ask if we could rent it our again to take some of the financial burden off us until the market picks up again. Can someone provide a sample letter or suggestion? Thanks in advance, Kari

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If your by-laws do not permit renting, a letter won’t do anything unfortunately. You may have to request a homeowners meeting and have a vote to add a rental provision to the by-laws. That could take a while.

I live in a condo and we have to seek permission to rent and they have the right to deny our request. I find that often people purchase condos without knowing the full ramifications and rules they’re governened by.

Why did you go a buy a big house without selling first, or at least having a prospective buyer? I’m sorry but you should not have purchased another home in this market until you were sure that your condo situation was under control.

Your last resort may be to sue them. You own the home and I still find it strange that a homeowners association is able to tell you what you can and can not do inside the confines of your own home.

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You’re SOL. You better rent the new place out until you can sell the old place. But DON’T let the renters tell anyone they are only renting, as the mortgage rates for investment property is higher.

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First of all how do they know the renters are not immediate family? Just tell them they are your long lost cousins.

Most associations have a limit as to how much percentage can be rented of the total units. Most have a low limit, about 25% of all units can be rentals. Because of the current real estate market, most don’t want to sell the unit until the market picks up, so they rent it. This brings the total above the max, and yours may be the one.

Do some research and inquire through county records as who the recorded owners are and who is actually living in each unit.

Unfortunately, the bylaws violate your civil rights! Simple as that! They cannot dictate what you can or cannot do with your own property as long as it’s within the law! Even though it’s part of the CC&R’s, they can’t force you to agree to something that is against the law. CC&R’s are not the law of the land.

This was tested in many states by owners in similar situations and the owners won in all cases. Suppose you own a single family house and the neighbors tell you that you cannot rent the house to anyone you please, or leave it vacant, or paint it pink, or do whatever you want with your own property! You would laugh at them.

Ignore them and let them take you to court! If you contact any real estate or civil lawyer, they would have a field day with the HOA. Remember, the HOA is composed of owners of the condos and they cannot supersede state and federal laws.

I’ve seen little people have a power play because they are members of the HOA and want you to feel their control over your own property.

It’s your property and you can do whatever you want within the law!

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What if I stop paying my condo mortgage,

in which way my credit will be affected?

I co-own an appt. with my ex-husband, I’m paying the condo mortgage myself, ’cause the re-financing was done under my name only(we had a deal, me taking care of the mortgage and he,will stay for free a couple of months to save money).but i’m not living there,the title still under both names(big mistake).my real state lawyer is trying to do a quick claim deed, to put the appt. just under my name.
right now, i’m not living there, i’m with my boyfriend, I dont want to keep paying without my ex moving out, but he is holding back the lawyers agreement.
another thing, my ex got a loan using this condo as warranty.

What if I stop paying the mortgage, what’s going to happen? with the loan he has, and with my credit?

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are you talking about the mortgage lates that could rack up and not allow your to purchase or anything else for a year or the foreclosure that could happen and then you cannot purchase for at least 2 years! I’m hoping that when you say ex you mean ex husband, if so, get that attorney moving so you can get out of this situation. You could be severly imparing your ability to obtain credit for a few years, best wishes
( 7 years title examiner, mortgage broker)

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anything with your name on it that is not getting paid and paid on time is going to get a bad mark by your name on your credit score. then that stays on your report for 5 years.

i would get a lawyer involved and get your ex out of there!

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Sounds like you have a stupid lawyer.

Taking your name off the title is NOT going to take your name off the mortgage.

If you stop paying, then you are in default of a judge’s order when you divorced and he can sue you for contempt.

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If you care about your credit rating (and you should) do NOT stop paying. If you do stop paying, it will be reported to the credit agencies at the very least, and the worst could be foreclosure.

Put pressure on your lawyer and your ex to get the quit-claim deed to have the condo put entirely into your own name. Once that is done, sell ASAP. You don’t need the condo, right? But you could probably use the cash. Is the condo yours under the divorce agreement? If so, you could use that to force the quit-claim through quickly. (It’s a quit-claim, as in he quits all claims to the deed on the unit!)

You mention a loan _he_ has. Well, if it’s in his name, then what YOU pay or don’t pay makes no difference to his credit. If _he_ stops payments on that loan, then it will affect him, not otherwise. Also, if he doesn’t pay his loan, it won’t affect you unless you are ALSO named as a co-signer on that loan.

Good luck – you don’t want to screw up your credit for the ex’s convenience!

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Your credit will surely be hurt as it will be considered late (at best). Most likely, it will hurt your credit.

Since he’s supposed to be living there for a few months, hopefully you can find someone to rent it from you..

Good luck

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I am in Florida. I cannot pay condo mortgage payments anymore.

Is there a way of give up my condo voluntarily ?

Is there such a law that alows me to give it away and not hurt my credit?I have an exellent credit but I cannot make the paymants anymore. After I bought it 3 years ago (on top of the market in FL)the mortgage did not include taxes,after few months they added additional $500 escrow a month and recently association fees went high.Morgatge is for 180K and monthly payment is over $2000.Please help!

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There is no law that will allow you to give it away (back to the bank?) without hurting your credit. Actually there is no way out of this without some kind of credit damage (well, there is, but it means making your monthly payments for as long as you agreed to do so 3 years ago when you signed for your condo).

I don’t know where you are in Florida, but it is going to matter. There are some regions of FL where many banks have stopped writing mortgages on condos because the value is falling too quickly. They can’t get an accurate fix on value, so they won’t write a mortgage. This is primarily true in Southern Florida, near Miami.

Your absolute best bet would be to sell the condo for something close to $180k. Even if you had to come up with the closing costs or something to get out, you’d be in better shape if you could sell.

I am guessing that you won’t get a bank to agree to a deed-in-lieu of foreclosure in southern FL. You can ask for that (from the loss mitigation department) or a short sale (where the lender agrees to take less than owed and it will satisfy the debt). The other answers are right that you have to get them to agree not to come after you for the remaining balance otherwise you will have a foreclosure and a bankruptcy on your record in short order.

The other issue is that money forgiven in this way is treated as ordinary income for tax purposes. The federal government has recently waived it’s tax for this purpose (for a limited amount of time), but many states haven’t.

You are in for a rocky time. I hope it works out as well as it possibly can for you.

good luck!

ps – If you had a roomate could you afford it? That might be your best option until housing stabilizes in FL.

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Yes, you can give the house back to the bank. It’s called a “Deed-in-lieu” for “deed in lieu of a foreclosure”.

You will agree to leave the home in pristine condition while the bank sells it, and they will agree to forgive a deficiency judgement against you should the sale of your home not cover the mortgage principle.

You would call the loss mitigation department (NOT customer service) to negotiate the deal. Don’t sign anything or agree to anything unless they won’t seek a deficiency judgement against you, and I highly recommend you get a real estate attorney to look over the documents before you sign.

As far as your credit goes, you won’t be able to purchase another home for 3 to 5 years at A-paper rates. It will STILL appear on your credit as a foreclosure, and banks will treat it as a foreclosure for future lending purposes.

It will damage your score….there is no way around it.

However, it is the BEST alternative if you can’t sell it and know you can’t continue the payments.

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Ouch! We have the same kind of payment shock here in Texas. I think it’s criminal for lenders to under-impound like this, but what do I know? The deed in lieu of foreclosure will get you out with a significant hit to your credit. But not as bad as a foreclosure. Maybe you can work a short sale with the lender instead. That way they don’t have to manage the property after you leave. Still hurts your credit, but that is survivable. Sorry to hear about your problem, good luck with solving it.

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I bought a house, but my condo hasn’t sold.

How do I get out of the condo mortgage?

Can the bank take my house?

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get a temporary bridge loan

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If the bank takes your house, it is called foreclosure…and that is something you DON’T want on your credit score. It’ll ruin you financially.

There is no way to get out of your mortgage with your credit rating intact. Sorry.

I suggest leasing or renting your condo….that way you can still make your payments on both the house and condo. Best of luck to you.

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If renting out your condo does not violate condominium association covenants and rules, rent it out or offer a “lease-option.” This is a lease, typically two years, where the tenant has the right to buy the property at any time during the term of the lease-option; the security deposit is applied to the down payment, and a portion of the monthly rent (usually 50%, but in “seller’s markets” when property is scarce 33%)that has been paid is also credited as “down payment.” The purchase price is set in the lease-option. This gives a buyer a way to build up a down payment and credit record (two years of paying rent on time counts with bankers on the mortgage application).

You must pay the condo mortgage. So either sell it or get a tenant (if allowed) for income to pay the mortgage. If you default on the condo and it goes into foreclosure, it not only ruins your credit for 10 years, you can lose your new house if forced into foreclosure & bankruptcy, or your interest rate could be bumped up because of the serious deterioration in your credit score and drastic change in your risk level. There is NO way out of that obligation but to pay up!

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Rent it out, and let them pay the Morg, once they do then u will be getting cash after its all paid..:) its nice to do

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How about sub leasing your condo ? Rent it out, let a rental company do the screening for you for a small fee .. It is a wise real estate investment..
prices are gonna turn back up and you will have two properties.
Good Luck

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you cannot get out of debt unless its known as no recourse loan.
Very few are able to get these its mainly for large commercial projects.
If you don’t pay the mortgage on either property they can both be forclosured on.
How ever the one you don’t pay on will be foreclosed first.
Then a deficiency judgment will be used as a way to attach your other assets to get full pmt.
Creditors don’t always manage bad debt properly and sometimes these things don’t come full circle. You could negotiate with the bank whats known as a short sale. this is where the bank takes less then what is owed to help you sell it and get rid of it.
If both loans are with the same banker or loan company then you are in a bit of a pickle cause if one loan goes delinquent they know exactly where your other asset is located cause they hold the loan.
Renting is a way out but often that is problematic with condos cause the by laws may be to strict to let you rent it out.
Check and read your bylaws for the condo. If they do let you rent it out they may have rules to keep out the trash as they say. Other then this maybe an add rent to own or Lease with option to buy bad credit welcome with down pmt.
The down pmt could help bail u out.
Good luck be creative and roll up your sleeves and get it marketable. Clean the property up make it shine then SELL SELL SELL. Also if you lease option the property out to a tenant buyer make sure you get all the info employment, credit check down pmt u name it. Try not to let any thing go into foreclosures its a messy thing and your credit will be ruined for at least 7 to 10 year minimum. I have seen others recover quicker then 7 years but they paid a tremendous price. Read a book called : making big money investing in foreclosures by Peter Conti and David Finkel
This book talks about lease options rent to own and short sales and ect. Good luck!

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I believe the question you are asking is can the bank take the house if you stop paying the condo mortgage? There are case were the condo could have been used as colateral on the house but its rare. If you stop paying the condo mortgage if could effect your house in the form a of a diffecency judgment,
Also bridge loans a very hard to get approved inless you have substancial equity in both. My guess is that you do not or you would be able to move the condo. Here are a couple suggestion that don’t reqire you becoming a land lord. Use to equity from the house to buy down the mortgage on the condo using a Home Equity line then discount the condo to the point it will sell.
Find an investor that is willing to take over the exsisting mortgage on the condo. You still have the mortgage in your name but an investor is paying the note. The investor then leases the property as a Lease option and when the market and tenant buyers are able to come to terms (market straightens out and buyer has the credit) the investor cashs you out.
If you live in Ohio or close I would be willing to look at your condo or I could give you some national investors that might be able to help.

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Yes, all of the above answers are true but you also need to think that you may end up losing both of them. If it gets to the point that you have not rented out the condo you may have to put both for rent just to get someone in one or the other.. very bad to lose 1 but both would be awful

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Low Occupancy Condo Complex Mortgage Rate?

I am applying for a mortgage for a condo I am buying in Connecticut. It is a new construction, so there are only about 6 sold out of 28 I believe. I hear because there is not 50% occupancy, that I would have trouble finding a lender, and it would be at a high interest rate. Even though I have an excellent credit score and I’m putting down about 36% for a down payment, would this be true?

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There are many lenders who will lend on “non-warrantable” condos (less than 50% owner occupied) at market rates. They will simply hold on to those loans (shelf) until the 50% has been reached and then sell them.

A few samples:
Countrywide
Bank of America
Taylor Bean Whittaker
FlagStar
Scores of Regional Banks who lend their own money and retain their loans.

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You were told correctly. The reason why they have the 50% occupancy guidelines (keep in mind, this is for seeking your OWN lender), is because there have been too many cases where condo projects have not gone well, so the developer just builds the rest and rents them out.

Usually after 50% have been sold, a formal HOA has been established, the residents, NOT the developer, now has control, therefore most banks will loan on them.

It’s not about getting lower rate, it’s about getting a loan….AT ALL.

No lender wants to be an “early in” on a condo project.

However, the developer should have a preferred lender for you to go through for the start-up of the project. This would be a lender where an agreement was struck before the project was started…as this is a common problem with new condo’s.

If the developer DOES NOT have a preferred lender with whom they have an arragement with, then I would highly encourage you NOT to buy into the complex….that is a RED FLAG.

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Most likely. FHA and Fannie Mae have regulations about condo occupancy with respect to interest rates. With you being able to put such a down payment on the property, it should help to make your monthly payments less.

I don’t know how hard it will be to get an actual lender, but if you are a good candidate with your credit score and income, you should find someone willing to work with you.

Good luck! I’m having a lot of the same problems, too.

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Unless you have a fixed-rate mortgage, the current mortgage interest rates are very important to deciding how much you should pay every month<!–therefore it is always a good idea to keep an eye on what the rates are doing. If interest rates should rise, so will your monthly payments and again, if interest rates were to fall, so would the amount you would have to pay.

Monthly repayments made on your mortgage and the amount that was borrowed, is determined by current mortgage interest rates. Different–>companies offer different interest rates so it is a good idea to shop around for the best deal before settling on one particular lender.

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Since rates are falling, why not go for a house instead? Of course with a house you would have to take care of the lawn etc but aren’t you going to have to pay a maintenance fee in the condo. I suggest you do some more home work and look into a real home instead of a Row house with a fancy name.

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The amount of ignorance in this thread is astounding…

Because the HOA hasn’t been turned over to the residents yet your condo will be non-warrantable. This makes it a bit harder for lenders for a couple of reasons…1)Comps in the building have not been established making it harder to get a solid appraisal, and 2) there is no way to stop the builder from issuing a special assessment if something goes wrong with the building. If the assessments go up you may no longer be able to afford the place.

Any large legit, mortgage lender should be able to handle this issue, just make sure you work with someone who isn’t an idiot.

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That has nothing to do with it. You should get approved as long as your credit is alright. Plus, if you’re a first home buyer with a down payment…that looks stellar to what ever financial institution you choose. Whatever you do, don’t go through CountryWide..they are in the process of going bankrubpt

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Do I have to make the last payment on my condo mortgage before closing?

The closing date of my condo sale is January 4th, and my next mortgage payment is not due until the 4th as well. It is an interest only loan, so there is no principle involved in the payment.

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Pay it in December if you want the interest deduction for this year. I would pay it early so they don’t charge the back interest at closing. If you pay it on the 4th and they called for the pay off amount on the 3rd you will end up with less at closing and have to wait for the refund.

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You can do it either way. I’d not bother, since the due date is the same as your close date. The mortgage company will provide the payoff amount a few days in advance, and they will include whatever you owe up to the time of closing.

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Yes, make your last mortgage payment or risk the chance down the road if you do miss a payment later that it won’t comeback to haunt you. It doesn’t matter what type of loan you have and did you realize you may have a balloon payment come up out of nowhere later down the road as well?

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I always advise customers to make the regular payment! You never know what may happen and as soon as you miss a mortgage payment, your credit rating takes a good hit. Think about it, when the chips are down, people will pay their house payment above anything else. What does it say about you if you missed a house payment?
Bottom line: don’t risk it.

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Since interest is paid in arrears, the amount you owe on the 4th won’t change. Better be safe than sorry! You might even want to pay a little early so that when the title company (or whoever is closing your loan) calls for the pay off your payment is reflected.

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Can’t sell my rental – what should I do?

I purchased a condo about 4 years ago. After owning it for about 1.5 years I bought a home and moved into it and rented the condo. So I have two mortgages, one for the condo and I owe $193k on it and my monthly payments are $1819, and one for my home which I owe $188k and pay $1343/month. I tried selling the condo for 6 months in 2007 (listed at $215k and lowered it to $199k) but had no buyers so I rented it again. I am only getting $1500/month from the renter and having to cover the extra costs. The condo mortgage is a 3 year ARM that has already reset and is currently 5.75%. Last years tax assessment value on the condo was $179k but this year it went up to $245k! So the condo is going up in value. How can I get rid of this condo? My renter is moving out on Feb 27th. I can’t afford the condo anymore. Thanks!

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60% of homes on the market right now are investor properties. And people with ARMs are going through foreclosures left and right.

So, basically, you should have made better decisions in the past.

All you can do now is try to rent the condo again or sell it and lose money.

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Your tax assessment on this property does not necessarily equate to current market value. Your situation is not uncommon right now. You have converted your primary residence (the condo) into an investment property. Right now you are in a losing investment with that property. All you can do is tough it out and continue to make up the shortfall, or let it go to foreclosure. Neither is overly attractive, I’m sure, but those are your options.

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Move into the condo and sell your house.

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Why does a bank want to see the condo associations “Reserve Fund”

amount when applying for a loan?

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I am a loan officer and I reside in a condo. The banks look for the management information as well as their blanket policy insurance and their financials to deem that the condo complex isn’t suffering any kind of financial hardship, and that all vendors are being paid for the services they perform. There are various items associated with your monthly maintanence fee such as waste removal, snow removal, landscaping, water, and other various disbursements. If the bank sees that they are having issues related to their reserve fund they may be hesitant to lend in a community that seems to be having financial issues. If the complex you are trying to buy in seems well kept, then you will have no issues. Best bet is to check with your realtor to get history on the community.

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The reserve fund is the extra protection money lenders want to see, its not like they will benefit by it,
but it gives them assurance that the condos groups is smart by having a emergency reserve fund. it just makes good business sense. it like a bank when they ask for collateral nothing more, just good business.

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they want to know that there is money available for the upkeep and maintenance of the building and it’s common areas to maintain the market value of the property.

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Because the bank wants to make sure the association has adequate funding for any unforeseen events that might happen.

Problem is, if the assocation doesn’t have a reserve fund, and something major happens, the only way to pay for it is through a special assessment. Basically, they take the cost and divide it among the units, and make you pay up immediately. Sometimes they’ll let you do a 1-year payment plan, but rarely more than that. A lot of people can’t absorb a financial hit like that, which could then cause you to default on the loan. And no one wants that (not the bank either).

These assessments, when they hit, could be $500. They could be $5000 or more. I’ve seen some as high as $8000 per unit. OUCH.

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I dont know, my never said anything about that…

Each bank is different in what they want to see

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Is there a difference between a condo mortgage rate and a home mortgage rate?

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since you are talking mortgage rates your mortgage company has the answer, ask them.

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I’m a mortgage broker. Most lenders do have a hit for loaning on condos. There are WAY too many details to cover every situation, but, if the broker you are working with is to make the same amount of money to do the loan, your rate would probably be around .125% higher for a condo vs. single family home.

In short – not enough for to NOT buy a condo vs. home.

Hope that helps.

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They should be the same…

Regarding the “mobile home rates”, yes, they are different because mortgage lenders don’t provide financing for mobile homes.

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There isn’t really a straight yes or no answer (as you may have noticed from the answers you’ve received so far). Some lenders charge a higher rate for condos, some only if they are high rise.

The list of things that will cause a lender to increase a mortgage rate is very long and varies with each lender according to what they consider risk factors.

In general, condos can carry a high interest rate verses a single family home but the increase is small, perhaps 0.125% to 0.250%.
I can provide more information, if you would like to give me a few more details. A link to email me can be found at my website listed below.

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there can be. risk factors such as high rise, and percent that is owner occupied can affect the rate you are offered.

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Usually there is a .25% “hit” on a condo as compared to a house. That quarter point can be paid up front, or added to your loan rate.

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There shouldn’t be much of a different. Mortgages are loans secured by real estate. The only legal difference between condos and homes is the way that the deeds are structured. They appreciate in different ways too.

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Depends on the type of financing you are getting. Most of the time, Fannie Mae & Freddie Mac don’t charge anything extra for condos, but most alternative products do. It can range anywhere from .125% to .75%, depending on loan to value and the specific bank buying the loan.

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I believe that the mortgage rates for condos and homes are the same. I think that mobile homes carry a different rate.

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Florida Real Estate – Condominiums and Leaseholds?

I planning to buy a condominium and it is a leasehold with the land belonging to the county. The county is Okaloosa County in Florida.

I can’t find anywhere in the Homeowner’s Association Agreement that states how long the lease is for.

First, is this standard for Florida condos?

Second, if the lease terms aren’t stated, how long are they for?

Third, should I still buy this?

Additional Details
I found the lease agreement in the condo agreement, but I can’t read it. The official record with the county is hard to read too. I see two agreements, one in the 50’s but can’t make anything out. The other is in 1980 and it’s with the developer.

I found the original lease. It’s 99 years from July 1956. So it expires in July 2055 with the right to renew under same terms.

Apparently in 1995, leaseholds were converted to fee simple by Okaloosa County Commissioners.

Anyone know about this?

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It is not standard in Florida. It is unique to Okaloosa, Santa Rosa, and Escambia Counties, Florida. The County does not own the land. It is owned by the federal government. The federal government leased Okaloosa Island (actual name: Santa Rosa Island) to Okaloosa County in the late 1950’s. The lease runs for 99 years.

Unless you plan to own the unit for over 50 years, there is not a problem. All the local banks understand how the land is titled and it does not cause a problem obtaining financing. However, FEMA regulations regarding disaster aid in the event of hurricane damage are probematic. If you do purchase, apply to Okaloosa County for a quit claim deed for your unit. The cost was $400.00 a few years ago (and is likely still $400.00). It will save you months of aggravation and paperwork in the event of hurricane damage.

You can get a copy of the Lease from the Clerk of Courts’ records department in at the Courthouse Annex in Shalimar, Florida
Source(s):
I worked in the Okaloosa County Clerk’s Office for 11 years.

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Florida is a pain in the butt to buy in now as it is. Fannie has been backing off their Loan To Value percentages in declining markets (such as FL), but word is they will stop that soon. So once you get past that, you’ll be left trying to find a lender that will lend against a condo in leasehold. That’s just about impossible now days. Unless the county has a 99 year lease with the condo association, I doubt there will be many lenders that will approve the project.

No leasehold is not common for condo’s. It is a good time to buy in Florida’s market, but I’d steer clear of this one. Getting financing will be a pain in the butt.

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Usually lease holds in Florida are for 99 years. No not all condos have this issue, the condo I lived in did not have a leasehold with the county.

It’s up to you, how long do you plan on living there and if you have an issue with it then a new buyer might also so it could make selling difficult.

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Multi Unit Water Damage, who is responsible for problem.?

When I was purchasing my condo. a year and a half ago, the person who owned the condo. below me was having her ceiling repaired due to water damage. The person repairing the ceiling was the owner and developer and of the condos. He fixed the ceiling but claimed that he never found the source of the leak. Now all three condos. in the building have been sold, and of course the water damage has reoccurred in the same spot.

The condo owner downstairs from me is saying that she thinks the leak is coming from a problem in my unit because it is above her.

Who is responsible? The developer who never found the source of the leak? The condo owner who has the leak because they didn’t insist on the developer find the source before closing the ceiling or is it me or is this a problem we are all responsible for?

My opinion is that she should have insisted that the source be found before the developer closed the ceiling, now it has been a year. Anyone know the legal side of this (Massachusetts)

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get a licensed contractor to come and repair the problem–do NOT
allow anyone involved WITH the problem to try to fix it.

then, when the independent licensee has found and corrected it,
it will be “easy” or easier to point the finger at the correct,
responsible party!

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she should go after the previous owner as there was no disclosure of the problem before she bought it.

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