Are Condos Good Investments?
This must be the question I am asked most often! The answer is YES!!!
The economy in the Pacific Northwest is good and more and more people are moving into the area. Home prices are going up. The median price for a home on Queen Anne or Magnolia for example is $645,000. Obviously, not everyone can afford to buy a home in this price range, but the median condo price on Queen Anne & Magnolia is $350,000 which is within the reach of many people.
Ownership, in my opinion, is always better than renting. Even First Time Buyers purchasing a $150,000- $200,000 studio or small 1 bedroom condo can build equity and make money in a relatively short time. The resales in this area are excellent.
Major factors in your analysis should be location, condition, and price.
How are Condos Financed?
How do lenders figure monthly payments for qualifying on a condo? What questions should Buyers ask?
Purchasers can obtain financing on a condo much the same way as with a house. Down payments for First Time Buyers average around 5%, but there are programs with 3% down, or even zero down, so it’s always best to check with your lender.
Your mortgage company will want to know about the condominium and the home owners association. They’ll want a copy of the resale certificate/public offering statement. They want to know how many units are owner-occupied.
Lenders will qualify you on prinicipal and interest payments, taxes, mortgage insurance, and monthly homeowners dues. Typically this number should not be more than 28% of your total monthly gross income.