Home Loan Approvals for Chicago Lofts
February 24, 2010
There is a lot of fiction and myth surrounding the best deals on lofts and the difficulty in obtaining mortgage financing. When it comes to Chicago loft financing, the truly good deals are quite easy to finance.
Let’s start first with wherever the myths are coming from. You’ll find a couple of listings at prices which are too really good to be true that cannot be financed. The seemingly logical conclusion is that it is hard to obtain a home loan approval in today’s current market. Nothing could be less true.
The reality of it is that the “best deals” within the condo and loft market place right now are merely not beneficial deals. They’re just low prices and they are possibly risky purchases. If I was purchasing a loft in Chicago right now, I’d have five questions that I’d use to determine if the property is a safe buy. Here would be my huge five:
1. Is this building predominantly owner-occupied or does it contain lots of rental units?
2. Is there a large single-investor holding much more than 10% of the units?
3. What percentage of the unit owners are past-due on their assessments?
4. Are there pending special assessments or legal actions against the association?
5. Does the homeowners association have adequate reserves to cover general maintenance?
If you look solely at today’s home costs versus the values from a couple of years ago, there are some properties that seem like outstanding values. For many of them, they’ll fail a single one of those huge five tests. Failing any, let alone much more than one, can mean that values in that building are likely to fall even further. In a market place where home prices are stabilized and now rising, there’s no reason to take an unnecessary risk.
Buying a loft in Chicago can be a great investment if you buy in the right building. It’s still possible to find a great Chicago mortgage loan.
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