Mortgage
Notice to All Mortgage Applicants Regarding Credit
Effective June 1, 2010
In accordance with "Fannie Mae" and investor guidelines, please be advised that within 72 hours of your scheduled closing date, your credit report will be updated.
Should any material changes occur, such as new debt, higher debt, a large cash advance on your credit card, large purchases on credit such as a new automobile, boat, engagement ring or other expensive jewelry, payment delinquencies, a reduced credit score, etc., it will be required that your loan be re-evaluated. The result could have an adverse impact on your loan approval and your rate and possibly cause a delay with your closing.
You should refrain from incurring any additional debt during your loan process, and in the event that you do, you should notify your mortgage professional as soon as possible so that they may begin the process of re-evaluation on your file.
One of the most important steps in preparing to purchase a condo is financing. Knowing what loan amount you qualify for is the first step to shopping in the right price range. A lender will review your credit, income and debts to determine how much you can borrow and discuss down payment and closing costs requirements. Most sellers will want you to be pre-approved. Therefore you will need to organize your documents.
All lenders require 2 years of W2 forms, 1 month of pay stubs and two months of complete bank statements or quarterly statements on Investment and retirement accounts. Divorce decrees, social security and pension letters may also be required.
Financing options vary depending on the condominium complex. Lenders will review each complex to determine what type of financing is available.
Since financing options vary for condos it is important to be pre-approved and have an established relationship with a Mortgage Loan Officer.
FHA Condo Update and InformationFHA has recently made changes to its approval rules that will have significant impact on buying and financing a condo.
FHA mortgages allow buyers to purchase FHA approved condos with just a 3.5% down payment. However, the complex needs to be approved and meet new criteria, if not, a 10% down payment is required.
- All FHA Loans require PMI, private mortgage insurance.
- All current FHA Condos project approvals expire on December 7, 2010
- Spot Approvals are no longer allowed
- Owner occupancy needs to be over 50% in each complex
- One person/entity cannot own more than 10% of units in a complex
- No Pending Litigation is allowed
If you have any questions, please contact Cindi J. Sorrentino at 203-871-9729 or email: csorrentino3@comcast.net.
Insurance
When purchasing a condo there are several areas of insurance you must think about. The condo association by-laws is the guide of what you need to insure. Make sure prior to closing you talk to your real estate agent to go over your insurance requirements.
Usually the association will cover the structure including the interior walls and anything within the walls such as plumbing and electrical. You are then responsible for everything else. This would include the paint on the walls, finished flooring, kitchen cabinets, vanity's and any built ins. These items are insured separately from your own personal property you bring in to the unit. They are usually called Additions & Alterations.
Some association by-laws will cover the Additions & Alterations but only those original to the unit. Any changes done afterwards you would need to cover.
Loss Assessment coverage protects you the unit owner if the Association insurance is not enough to cover a loss and you could be assessed a percentage of the claim.
The insurance you take out is a condo owner's policy or HO-6. Make sure you cover your contents to replace them. Always write insurance on a replacement cost basis. You will also need liability coverage that is part of the HO-6 policy. This provides coverage in case someone gets hurt inside your unit. You should have no less than $300,000 of liability coverage.
If you have any questions please contact Bob Mills at Mills & Mills Insurance 203-762-8373 or bob.m.mills@snet.net.
The information on this page is third party material that we provide as a convenience to you. We do not verify its accuracy and are in no way responsible or liable for its content. This information is governed by the third party information disclaimer in the Terms and Conditions of Use section of this website.
