sure it will fulfill the requirements of the different loan programs.
Townhouses: A townhouse is a home that shares walls with another home. These types of homes are usually in a modern housing development all lined up in a row. Townhomes are usually straightforward to finance; most lenders treat them the same as a single-family home. Condominiums: Condos usually look like townhouses, with multiple properties sharing walls. But a townhouse is its own separate property that is treated like a “normal” house, whereas a condo is a part of a larger whole. When you buy a condo, you agree to share certain aspects of the larger condominium complex. This can include things like a pool, a gym, a parking garage, etc. To cover the expenses for these amenities, condo owners pay a fee to the condominium complex. These fees can be expensive, depending on the amount of amenities and services the complex offers. While a good portion of the condo fees everyone pays go towards maintenance of the offered amenities, the condo association will also use some of those monthly fees to purchase a master insurance policy for the entire property. As an example, this would help cover the legal fees that could ensue if someone were to get hurt using the shared pool. Lenders have different requirements for this. The underwriter will review the master insurance policy to ensure that it is adequate to qualify for the loan. With a condo, it’s not just you that has to be approved — the entire condo complex has to be approved for a loan. This makes it far more challenging to get condos approved than standard properties.
Similarly, if the association is involved in a lawsuit at the time of
63
Powered by FlippingBook