Guide for Finding the Perfect Second Home Part 8

Will the property qualify?
That seems like an odd question, but these days it’s the first thing that comes to mind when a buyer says they want a loan. Because of the new more restrictive lending rules properties that you could easily have gotten a loan a couple years ago are tricky now. One of the biggest changes is in condominiums. If the lender perceives that the property is a “condotel” they may not we able to make a loan on the property. Things that will give the lender the impression that the complex could be a “condotel” are a front desk, time shares and short term rentals in the complex. The lenders are going on the internet and searching for the name of the complex and if anyone is renting their unit they are saying it’s a “condotel”.

Even single family homes can have some issues. An example is if the value of the lot is too high in relationship to what the structure is worth. That seems odd, but if the property is outside of the cookie cutter world that the lenders like, then it’s much harder to get the loan. The lenders have investors who are funding the loans; the source for money has become very conservative.

If you property is an odd one, or even a condo it will still probably be possible to get a loan, but figure you may have to put more money down and the interest rate may be higher.