Condo Conversion, trouble getting mortgage.. (rentals, condominiums, good credit)

[poppydew]

Anyone out there trying to qualify for a mortgage, and haveing trouble due to the type of unit you are buying? I am trying to buy a condo in a 50% converted (from rentals) building in Journal Square, NJ, and the mortgage company is giving me a hard-time. Any expereince with this?

Thanks
Poppy

[veuvegirl]

From my understanding there is supposed to be a big shift in the mortgage business on April 1st....

[poppydew]

Any specifics on the shift?

[veuvegirl]

Sadly no. Hubby's friend is in the business, they had a long talk about it a couple of weeks ago, he just said they were planning on increasing the mortgages being approved for buyers.

[poppydew]

YAY!!! Good to hear. I am having trouble now, even with a decent income, low debt, and a good credit score. I really feel the crunch. Rates are not that low either, they were better last month. Thanks for your insider info.

[veuvegirl]

Let's hope! Things change on a dime.

[RabbleRouser]

Department of Housing and Urban Development (HUD) recently approved the FHA guidelines for lending and increased the loan amounts available under FHA mortgages.

That is supposed to help people qualify for higher priced mortgages (meaning bigger loans, not interest rates).

FHA has always been based on a national medium income/market and this gives people in a higher income bracket and buying power, the ability to obtain these federally backed loans.

[Marc Paolella]

Hi Poppy,

Condominiums with a high proportion of rented units are always tough to finance. The thought is always that buildings with a high proportion of tenants are not maintained as well as buildings which are mostly owner-occupied. 50% or more tenants is considered excessive and will cause you much grief in getting a mortgage. When I do an appraisal for a condominium mortgage the bank wants me to establish the exact percentage of renters. When it gets too high I have to explain it because they are just not comfortable with complexes that contain too many tenants.

[JennyJenn]

Originally Posted by Marc Paolella

Hi Poppy,

Condominiums with a high proportion of rented units are always tough to finance. The thought is always that buildings with a high proportion of tenants are not maintained as well as buildings which are mostly owner-occupied. 50% or more tenants is considered excessive and will cause you much grief in getting a mortgage. When I do an appraisal for a condominium mortgage the bank wants me to establish the exact percentage of renters. When it gets too high I have to explain it because they are just not comfortable with complexes that contain too many tenants.

Exactly. Lenders have really tightened the reigns in regards to condo financing. I hope it works out for you.

[poppydew]

Thanks for the advice! I ended up not putting an offer down for other reasons, but now I will think about this issue when I am searching.