i am buying a condo the association want 20 percent down. To whom and for whom is that money for

Asked by John, Aventura, FL Tue Mar 6, 2012

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Nadine Mauro, Agent, Lake Worth, FL
Tue Mar 6, 2012
Hi John,

With so many foreclosures on condos, many associations are looking for the protection that a 20% down payment will provide. Many feel that you have more stability and will be less likely to be foreclosed on. People who have little to lose when it comes to foreclosure are also very likely to pay the association fees, thus putting pressure on the other residents who do pay.

The 20 percent down payment will be used to pay for the condo, presuming you will be getting an 80% mortgage. If you will be paying cash, the 20% down payment will be held in escrow until closing, at which point you will be paying the other 80%.

Let me know if I can be of further service.

Nadine Mauro
Highlight Realty
561-414-0864
NadineSellsHouses@gmail.com
http://www.floridahouseseller.com
1 vote
Irina Karan, Agent, Aventura, FL
Sun Mar 25, 2012
Hello John,

Are you buying your condo from the condo association? If yes, then they can require 20% down, if they have in their by-laws or amendments. This is to make sure that the new condo owners will be financially sound and will pay required maintenance fee and assessments on time.

If you are getting a mortgage from a bank or a mortgage company, then it's the mortgage guidelines that they are referring to, which require 20% down in most cases. This money is your downpayment money and will be used by the title company to pay the seller, in accordance with your contract.

Please let me know if you have any other questions,

Irina Karan
Beachfront Realty, Inc.
IrinaKaran@gmail.com
305-904-2355
0 votes
Annette Levi…, , New York, NY
Wed Mar 7, 2012
John,
Nadine answer is correct but I need to add that many condominiums cannot get PMI. PMI is mortgage insurance that you pay for if you put less then 20% down (of the purchase price or appraisal whichever is lower). Before going forward, find out how many units are in foreclosure or behind in there association fees.
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