Condo-Tel financing can be challenging. Condo-Tel units are a relatively new investment property vehicle being offered in vacation and resort areas. Condo-Tel units are typically set up as a condo with a lobby area containing a rental desk. Condo-Tel units frequently do not have kitchens. Owners may use the property when they wish and make their Condo-Tel unit available for weekly rental through a Condo-Tel rental pool. A Condo-Tel may be a viable alternative to the more traditional approach of buying a condo at the beach as a second home and then placing the unit into a rental program run by a property management company. In many areas of the country, these management fees can run from 25 to 30% of your rental income. Some of the Condo-Tel units I have looked at appear to offer a less expensive alternative to the management fees but, as always, you need to do your due diligence to be sure. From a financing perspective, a Condo-Tel will require a larger down payment than a more traditional condominium. Condos used as second or vacation homes can generally be financed with a 10% down payment and mortgage insurance can be avoided with a combination condo-tel financing strategy. Although at slightly higher rates, I do have several lenders who will make available 95% financing. Please email with any questions about condo-tel financing.
Unfortunately, many mortgage lenders have not yet caught on to this rapidly growing segment of the market. As a mortgage broker, I have access to nearly 700 lenders and some fairly sophisticated lender search tools. Of the 700 lenders, only 14 returned any loan programs which allow Condo-Tel financing. Most require fully documented income with 25-30% down payments with no secondary financing permitted. However, one of my favorite lenders will permit up to 80% financing on a full doc loan and up to 75% financing on a stated income mortgage loan or No Ratio mortgage. This lender will permit interest only mortgage condo-tel financing which may significantly reduce your monthly costs.
Max Loan Amount Full Doc Stated Income/No Ratio
If you are looking at these and would like to explore some options, please give me a call or send me an email with as much detail as possible
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I have an article "Buying your home in 2008" by email explaining negotiating strategy in today's market.
As a Certified Mortgage Planning Specialist, I offer an analysis of your situation today can make suggestions on how small changes in how your consumer and mortgage debt is structured today can have a life changing effect in the years to come. Read more about this free, no obligation service.
Prequalify for your