Condo Loans & Neigbours Finances

Now a day condo owners are not only sharing their roofs and wall of their respective condos but also thier financial conditions with each others. Lenders are now taking into account the financial condition of entire blocks while assessing individual applications for mortgages and refinancing.

In the past condos have been considered as the least secure segment of the housing market because of their popularity among entry-level buyers and speculators. Condos have been among the hardest hit by recent crisis. As a result of which many builders’ sales have dropped by as much as 70%.

Now the trend in the market has changed lenders instead of denying loans outright, simply charge higher rates or limit buyers’ options to condos with relatively stable ownerships. According to experts this will make the condo market even more worse.

With this some of the developer have started a new trend of converting their condos to apartments hoping to create a new rental market due to foreclosures. While some others have brought down their prices, forcing older seller to cut their prices as well.

According to the recent studies the condo market may get back on its track in late 2009 or in early 2010. However, change in mortgage policies may not be as immediate. Also there is always some lag between the change in market conditions and the response of major banks.

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