Financing in Rochester Hills>Question Details

Andrey, Home Buyer in Rochester Hills, MI

Is it true that interest rates on attached condos are higher (vs detached condos)?

Asked by Andrey, Rochester Hills, MI Fri Jan 14, 2011

according to my mortgage broker, the only way to bring down the interest rate where it's compatible with rates on single family homes and detached condos would be by buying (or paying?) points; just putting more money down (25% vs 20%) would not affect the interest rate. Comments?

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It depends on who will be funding the loan. All Fannie, Freddie, and government loans will have a small bump in the rate regardless of loan to value ratio. Some lenders will add more of a bump than others, I know lenders that avoid condo loans altogether. I would recommend you ask the lender for a quote for a single family residence first, then ask if the price was the same for a condo with the same down payment and in the same area, what would the rate be. You then can consider the difference in the rate to determine if you want to change what you shop for.
0 votes Thank Flag Link Sat Oct 26, 2013
Hello Andrey,

It is true that there is a loan level price adjustment [http://www.luettmortgagegroup.com/2011/01/loan-level-price-a… for condo financing with a loan-to-value greater than 75%.

One way we've been able to get around that is by splitting up the financing into 2 loans; a first mortgage at 75% of the purchase price and a second mortgage at 5% or 10% of the purchase price (75/5/20 or 75/10/15).

We're able to lend in all 50 states, please contact me if you're interested in learning more about this program.

Regards,
Andrew
aluett@luettmortgagegroup.com
0 votes Thank Flag Link Fri Jan 14, 2011
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