Condotel mortgage rates rise due to interest rate spikes

Condotel Financing

Condotel Mortgage Rates

Mortgage rates have gone up nine weeks in a row.  FHA mortgage rates were 3.25% just a little over a month ago and now it is at 4.5%.  Conventional mortgage rates were at 3.5% and now is almost at 5.0%.  Condotel mortgage rates have also gone up.  7/1 ARM condotel mortgage rates were trading at the 5.25% mark for second homes but now they are trading at 5.625% amortized over 30 years.

Condotel mortgage programs

We offer condotel mortgage loans in California, Illinois and Florida.  If the condotel unit is located in other states, please contact me and I will give you condotel mortgage lenders who specialize in condotel financing in your state.  Condotel mortgage programs that are available in today’s market are mainly Adjustable Rate Mortgage products, also known as ARM products.  Condotel mortgage loans are portfolio loans, which means the condotel mortgage lender holds and services the condotel mortgage loan and does not sell it to the secondary market.  15 year and 30 year fixed rate condotel mortgage loans are nonexistent that I know of.  There are 3/1 ARM, 5/1 ARM, and 7/1 ARM condotel mortgage loan products that we offer.  They are all amortized over 30 years.  Minimum loan amounts start at $100,000 up to $3,000,000.  There are no prepayment penalty.

Condotel mortgage rates

Condotel mortgage rates start at 5.25% on a 3/1 ARM program.  Condotel mortgage rates for a 5/1 ARM is set at a starter rate of 5.5%.  Condotel mortgage rates for a 7/1 ARM start at 5.625%.  The index is based on the Cost Maturity Treasury and the margin is set at 3.0%.   After the initial rate period expires, the new adjustable mortgage rate cannot be lower than the starter rate.

Condotel mortgage loan guidelines

Basic condotel mortgage loan requirements are as follows:

1. Borrower needs minimum credit score of 680 FICO.

2. Maximum debt to income ratio of 40% including the new condotel purchase mortgage loan.

4. Minimum 75% loan to value on condotel purchase loans and condotel refinance loans for primary and second homes.

5. 60% loan to value on investment condotel mortgage loans.

6.  One year reserves for new condotel purchase and any real estate owned.

Condotel unit and Condo Hotel requirements

Condo Hotel complex needs to be in good financial and structural condition.  A one page condotel questionnaire form needs to be completed by the Condotel Homeowners Association manager which consists of whether the condo hotel complex has pending litigation and/or any major building violation issues.

Condotel unit must have at least one bedroom and a functional kitchen.

The condotel complex nor its subsidiaries cannot be under bankruptcy protection nor have pending litigation.

If you have any questions, contact Gustan Cho at  262-716-8151 or email me at gcho@gustancho.com.  You can also subscribe to our daily free mortgage and real estate newsletter at www.gustancho.com .

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The information contained on Gustan Cho Associates website is for informational purposes only and is not an advertisement for products offered by The Gustan Cho Team @ Gustan Cho Associates or its affiliates. The views and opinions expressed herein are those of the author and/or guest writers of Gustan Cho Associates Mortgage & Real Estate Information Resource Center website and do not reflect the policy of Gustan Cho Associates Lenders Network, its officers, subsidiaries, parent, or affiliates.

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