what are risks associated with buying an no FTH condos?

Asked by Sudheer Someshwara, New York, NY Sat Oct 27, 2012

This question was asked from http://www.trulia.com/property/3086618891-110-Somerset-St-23…

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Michael Adams, Agent, Belle Mead, NJ
Sat Oct 27, 2012
Sudheer, I assume that you mean FHA. The Fedreal Housing Authority requires certain criteria to be met to approve a housing/condo development to be FHA approved. The fact that the Vue is not FHA apporved may simply be because they did not apply.

For a luxury condo development, there are very strong arguments for using a conventional mortgage. First of all, it is image. Only a certain level of income can afford to purchase one of thses condos; making ownership exclusive. Conventional rates are usually the lowest interest rates around for those who want to take out a new loan. Thirdly, using a conventional mortgage instead of buying into a property with an FHA loan and only 3.5 to 5 percent equity means starting with greater home equity. Many foreclosures happen(ed) because people bought homes with little or no equity.The market dropped and now they're unable to refinance, and selling doesn't raise enough cash to pay off their principal balance While paying a big down payment is hard, at least it doesn't leave borrowers walking on thin ice in fear of losing their homes if prices dip

The positives of a FHA mortgage is the relatively low down payment and credit scores required to purchase and the ability of being assumable.

I hope this helps. If you have more question, call, text or email me directly about central New Jersey real estate.

Best of luck to you,

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