For many, owning a condominium is a great way to get their foot into the real estate investment world. But even then, out-of-pocket financing can make this goal difficult. Obtaining a condo loan will make purchasing your dream condo more achievable, and before you start, it’s crucial that you’re prepared for the most important step: the downpayment.
This blog will explore everything you need to know about the downpayment on a condo and what factors will influence the downpayment.
How Much is the Average Condo Downpayment?
Downpayments on condos will be pretty similar to those for single-family homes, depending on what type of loan you are using. You should also note that condo mortgages will tend to be higher because they’re deemed a riskier loan.
In general, you can expect to make a down payment of between 3% and 20% of the purchase price. Because most condo projects don’t seek FHA approval, they follow conventional loan downpayment requirements, which can look something like this:
- 3% for first-time buyers
- 5% for non-first-time buyers
- 10% for second home condos and jumbo loans
- 20% on non-warrantable condo loans and investment property condo loans
Choosing to pay more upfront can reduce your monthly mortgage payments and even avoid mortgage insurance.
Factors That Influence Condo Downpayment
Downpayments on condos are not set in stone, and there are a number of factors that can influence how much you’ll need to pay.
- Credit score: Having a strong credit score can help you avoid a higher downpayment. A score of at least 620 is needed, and 700 is recommended for a low downpayment.
- Loan type: Different loans have their own downpayment requirements
- Intended use: Investment properties and second homes can sometimes have larger downpayment requirements
Loan Options
The type of loan you use will influence how much downpayment you’ll need for a condo. For example, some FHA loans will require downpayments as low as 3.5% if the condo is FHA-approved. VA loans generally do not require a downpayment, and first-time buyer programs have downpayment assistance plans starting from as low as 3%.
As you can see, the downpayment on your condo will depend on what loan you are using.
Condo Loans in Fort Lauderdale
Are you ready to purchase a condo? Start the process today by calling the experienced Florida State Mortgage Group, Inc., team to find out whether you’re eligible for a condo loan. Call us today at (954) 359-3000.
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