January 18, 2013

How to refinance your condo

By Marcie Geffner - HSH.com

If you own a condominium and want to refinance your mortgage, you'll need to meet two sets of loan guidelines: one that applies to you and another that applies to your condo owners' association.

The rules for you are essentially the same regardless of the property type, but the rules for your association can create issues when refinancing your loan, says Joe Metzler, a mortgage specialist with Mortgages Unlimited in St. Paul, Minn.

The first issue is whether your condo has been approved for conventional (Fannie Mae or Freddie Mac) or FHA financing. Approval is required because your association is essentially a third-party involved in refinancing your loan and that involvement adds "an additional element of risk" for the lender, Metzler explains.