Condotel Financing Mortgage Guidelines And Requirements

In this blog, we will discuss and cover condotel financing mortgage guidelines. Condotels are condominium units that are within a condo hotel and the condo hotel management staff is responsible for its upkeep, rentals, and maintenance for a percentage of the rental income. If the condo hotel management staff does not rent a condotel unit, they do not make any income. In this article, we will cover and discuss condotel loans and requirements.

Downturn Of Condo Hotel Market

Condotel unit values have plummeted during the real estate, banking, credit, and financial collapse of 2008. However, condotels have seen a steady increase in value, and this year, condotel units have skyrocketed to double-digit increases in some areas of Florida. One of the main factors why condotel units have not kept up with other property appreciation. This is due to the fact that condotel financing has come to an abrupt halt after the real estate and financial collapse of 2008.

Condotel Financing Mortgage Guidelines & Demise Of Condotel Financing After Real Estate Meltdown

Many banks and mortgage bankers used to finance condotels prior to the collapse and many condotel unit owners still have condotel financing loans with big banks such as Wells Fargo, Chase, Citibank, Bank of America, and other local, regional, and national banks at high-interest rates. Unfortunately, these banks and lenders will not even consider refinancing condotel units ever. This holds true even though they carry and service the condotel unit mortgage note. It does not matter whether you have been paying your condotel mortgage loan payment timely for many years. Or whether you have other asset accounts with their institution. The answer will always be no.

Condotel Mortgage Lenders

The good news is Gustan Cho Associates specialize in condotel financing in the United States. We can help first-time homebuyers or vacation home/second home condotel buyers. We also offer condotel investment mortgage loan programs for condotel investors. Or real estate investors who are interested in purchasing multiple condotel units and adding them to their real estate investment portfolio.

Primary and Second/Vacation Home Condotel Financing Mortgage Guidelines

Those who do not own a primary residence or own a primary residence but are looking to purchase a second home or vacation home came to the right website. Condotel Financing Mortgage Guidelines at Gustan Cho Associates are now available. We offer a 30-year portfolio condotel mortgage loan but on a 3/1 ARM, 5/1 ARM, or 7/1 ARM. The rates are fixed for the first, 3, 5, or 7 years. Depending on which adjustable-rate mortgage program the borrower chooses, the rates will adjust every year after the fixed-rate period for the life of the condotel mortgage loan. The index is based on the Cost Maturity Index ( CMT). The margin is a 3.0% fixed margin rate. The adjustment rate cannot be lower than the starter rate. Condotel Financing mortgage rates have a starter rate. This is based on today’s pricing and cannot guarantee a rate until we lock condotel financing mortgage loans.

Loan To Value On Condotel Financing

The maximum loan to value allowed is 75% LTV on purchase condotel mortgage loans and refinance condotel mortgage loans.  Cashout refinance condotel mortgage loans are allowed up to a 75% LTV as well. Keep in mind that the 75% loan to value is only for primary homes, second homes, and investment homes. Those condotel buyers who have two or more properties are considered investors and for investment condotel financing, the loan to value cap is set at 60% LTV. Both of the loans to value cap was just increased. Prior loan to value caps was 75% loan to value for primary, second, vacation homes 60% loan to value for investment condotels.

Condotel Financing Credit Requirements And Condotel Financing Process

To qualify for condotel financing, the borrower needs a minimum credit score of 680 FICO. The borrower needs one year’s reserves which can be in pension funds, investment accounts, or other documented assets for both the primary residence as well as the subject’s condotel purchase. A maximum of 40% back-end debt ratio is required. In the event, if the condotel financing mortgage loan borrower is short with wage income, other income sources can be used. We can use the asset depletion program where a percentage of the borrower’s assets can be used for income-qualifying purposes.

Issues On Condo Hotel Building

The condo-hotel complex cannot have major building or structural issues and cannot be in financial despair.  Any structures or buildings associated with the condo-hotel cannot be under bankruptcy protection nor can there be any major pending litigation.  If you are interested in purchase a condotel unit, please contact us at Gustan Cho Associates at 262-716-8151 or text us for a faster response. Or email us at [email protected] The team at Gustan Cho Associates is available 7 days a week, evenings, weekends, and holidays.

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Difference Between Condotel Financing Versus Warrantable Condo Mortgage Guidelines

Condo Hotel Mortgages and NON-QM Loans are back. A Condo-Hotel is a Condominium inside a Hotel Complex. The Condo Hotel Complex Homeowners Association (HOA) is in charge of managing all condotel units within the Hotel Complex. Condo Hotel owners have the luxury to own and occupy their Condotel units when vacationing. Condotel unit owners have the benefits of renting out their Condo-Hotel units when they are not using them.

Condo Hotel Building Association

The Condo Hotel management company manages the rental and maintenance of the Condo Hotel unit for a percentage of the income. Many Condo Hotel owners have their mortgage and expenses covered by the rental income their Condo-Hotel units bring in. Other Condotel owners make positive annual cash flow and have the luxury of occupying their Condotel units. Condotels are excellent investments. In this article, we will discuss and cover the qualification requirements for condotel financing.

Condo Hotel Concept Versus Warrantable Condominium Complex

In order to understand the condotel concept, it is important to understand a little bit about how real estate works. Most everyone has stayed in a hotel. The hotel owner, usually one person or business, rents out rooms in the hotel for a fee. Condotel Unit Owners can live in Condotels full time as their primary homes.

Condo Hotel Unit As Primary Or Second Home

Meanwhile, condos are generally sold as homes or second homes. Buying a condo is like buying a house. The owner does not pay rent to anyone. The intention behind the condotel is to mix these two forms of real estate to make something that is the best of both worlds. They have all the luxury of a hotel, but the buyer owns them outright.

How Did The Condo Hotel Concept Start?

The condotel concept started as a way for hotel companies to fund new hotels. Building a hotel is expensive. Instead of building the hotel first and then allowing people to rent the rooms, condotel owners sell the hotel rooms and suites as though they were houses in a housing development. The hotel companies get money to fund their building, and the buyers get all the luxury of a hotel without having to move out at the end of the week.

What Are NON-QM Loans?

NON-QM Loans are portfolio loans that are also called non-conforming loans. Bank Statement Mortgages for self-employed borrowers are considered NON-QM Loans. Condo Hotel Unit Buyers and NON-WARRANTABLE Condominium Buyers who cannot show income or are self-employed can qualify for 12 months or 24 months banks statements loans. Mortgage rates are higher and a 20% down payment is required.

Condo Hotel Ownership

Owning a condotel gives the buyer all the perks of staying in a hotel of the same brand. So the buyer gets room service, maid service, and a concierge. He or she also has use of all the hotel amenities like the pool and fitness center.

Condo Hotel As Income-Producing Investment

Another advantage of owning a condotel is that the room can be rented out. If the owner plans to be out of the country for a week or two, the hotel can rent out the owner’s room at normal market rates. In exchange for making the booking and managing the space while the owner is gone, the hotel gets to keep 20 to 40 percent of the rental profit.

Risks with Condo Hotel Investments

There are some drawbacks to this sort of investment. No one can guarantee that the owner will make money through the rental process. After buying the room, paying any maintenance fees, and giving the hotel its percentage of the rental, there may be little money left. Also, local laws may prohibit the owner from living in the hotel for more than a certain number of days every year.

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Qualifying For Condotel Financing Mortgage Guidelines

Word is out that Condotel mortgage loans are back in full force in the United States, especially in Florida, California, Texas, Georgia, Illinois, Michigan, Ohio, Kentucky, Colorado, New Jersey, Pennsylvania, and Mississippi. Florida condotel loans have been next to non-existent since the real estate and credit meltdown of 2008. Most folks who own Condotels in Georgia, Texas, Colorado, Kentucky, Mississippi, New Jersey, Pennsylvania, Ohio, Michigan, California, Florida, and Illinois and have condotel loans have been stuck with their high-interest condotel mortgage loans The majority of Florida Condotel unit owners and Illinois Condotel unit owners who have Condotel mortgages have their interest rates north of 8%. Many have been fruitlessly trying to refinance their Condotel loans the past several years to no avail. No worries. I can help any Condotel unit owners refinance their Condo Hotel Loans

Get Qualified For Condotel Financing Mortgage Guidelines

As for those folks who dreamed of owning a Condotel unit for the past several years, they are in luck. Most folks who have been interested in buying a Condotel unit have given up due to Condotel financing being non-existent. Most Condotel unit sellers would not even entertain a Condotel purchase offer unless it was cash. Well, now that is not the case anymore.  Condotel Financing is back and strong.

Condo Hotel Loans Available In All 50 States

I get dozens of Condotel financing inquiries each day from all over the United States and even out of the country. The problem I am running into now is that even though the Condo Hotel complex and the borrower is pre-approved for a Condotel loan, the sellers and selling real estate agent have a hard time believing that the potential Condotel buyer has secured pre-approval. In almost all of the cases, I need to either speak to the Condotel seller or the selling agent and confirm that the potential borrower has been pre-approved for a Condotel mortgage loan.

Condotel Financing Mortgage Guidelines: Adjustable Rate Mortgages

Condo Hotel Loans are portfolio loans and are offered as 3/1 ARM, 5/1 ARM, and 7/1 ARM products. Condotel mortgage loans are amortized over 30 years and there are no prepayment penalties. There are lending guidelines and reserve requirements

Investment Condo Hotel Loans

For condotel unit buyers who do not qualify due to poor credit or not enough income, there are alternative financing available. The team at Gustan Cho Associates now offers condotel mortgage loans for investment home buyers. We are correspondent lenders with investors who are the largest and most reputable private money lenders in the United States. Investment Condo Hotel Loans require a 60% loan to value. Closing is normally done in 3 weeks or less. Condotel Buyers who have any questions on Condotel mortgage loans, please feel free to contact Gustan Cho at 262-716-8151 or text us for a faster response. Or email Gustan Cho Associates at [email protected]

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