Bridgepoint Funding – Summary

Getting a mortgage on a condo is different than getting a mortgage on any other type of residential property: condos are harder.

They are harder because they are riskier. They are riskier because lenders don’t have to worry only about two entities only (borrower and property used as collateral); they have to worry about those + the common areas, the home owners’ association and the other unit owners. Bridgepoint Funding

And there’s nothing a different mortgage broker or lender’s loan officer can do to change that.

Would-Be Borrower Bob Looks for a Centennial Mortgage Broker

Let’s say borrower Bob wants to buy a condo in Littleton, just south of Denver. He looks for a mortgage broker in Littleton or one in Centennial. No matter which one Bob chooses, his mortgage broker, to give him the best rate, will want to get him a conventional, conforming loan.

If that’s not possible, this Centennial mortgage broker (Yes, we’re making Bob pick the Centennial mortgage broker: she’s got more good reviews on Yelp than the other ones plus I named this section “Would-Be Borrower Bob Looks for a Centennial Mortgage Broker.”) will try to get Bob an FHA loan before trying any other kind of loan: they’re cheaper (i.e., they come with lower interest rates).

Conforming conventional loans are loans that Fannie Mae or Freddie Mac would purchase. FHA loans are loans that the FHA would insure.

The first thing to keep in mind is that it is a lot harder to get an FHA condo approval than a conventional, conforming one: the FHA will insure condo mortgages only on units that are part of an approved project or if someone spot-approves the unit (takes time, effort, and can cost money too) and their approval project is harder and it costs money to remain approved, so few projects stay approved.

So, the first thing people who’re looking to buy or refinance a condo unit is to determine whether they qualify for a conforming conventional loan or not.

Or if the mortgage broker or lender they’re working with can do non-warrantable condos. (Non-warrantable condos is how the mortgage industry calls condo units that don’t fit the criteria of Fannie Mae, Freddie Mac or FHA.)

Non-warrantable condo mortgage loan programs have looser qualifying criteria but they still have qualifying criteria. Borrowers should make sure that their un-warrantable condo matches that criteria.