CONDOMINIUMS:
TRANSACTIONS TECHNIQUES
AND MORE

Dear Real Estate Professionals, Future and Current Homeowners,

I am excited to continue taking you through my new course, “Condos with Manny Kagan: Classes by a Mortgage Broker”!

Class Two of the series is available at: https://youtu.be/Y2zKHy97BcI

Also, make sure you read the notes below and save them for your future reference!

CLASS II  (Week Two)

…Before moving forward, let’s take a look at who lends money for condos, i.e. where borrowers can get a mortgage. The major institutions, like Bank of America, Citibank, Wells Fargo and Chase are primarily interested in depositors. For those who keep their money in the bank, they might offer adjustable mortgages fixed for 3, 5, 7 or 10 years. These are portfolio loans which might have an interest rate lower than 30 years fixed loans, and are mostly Jumbo loans. To get them, there are two conditions – customers’ money in the bank and being able to qualify for the loan, which might be challenging.

Sometimes banks can offer Conforming loans as well, but these are sold to Fannie and Freddie and have rates similar to other lenders. In the past, banks like First Republic Bank, as well as Silicon Valley Bank, were able to bend the rules just to attract more customers. History has shown that those who did that, sooner or later got out of the business. Then there are medium size banks and credit unions. All of them follow internal guidelines. Sometimes one of them might offer loans where others could not. For example, some of them do not require an HOA certificate. Additionally, there are mortgage brokers who represent a variety of the specific wholesale lenders. Some of which, like Rocket Mortgage, are trying to drum up online business.

Mortgages are divided into two categories — QM (quality mortgages) and non-QM mortgages. Since the majority of the lenders sell their loans to Fannie Mae and Freddie Mac, their underwriting guidance for QM mortgages can be strict. The solution is offered by the mortgage banks who can offer financing for non-QM mortgages. The same lenders also offer mortgages for non-warrantable condos…

To be continued next Wednesday…

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Need help? Call me: (415) 225-7920

Best wishes,

Manny Kagan,
President,
Pacific Bay Financial Corporation,
Your professional mortgage broker since 1983

NMLS #205637
DRE #00874630