November 1, 2018
Condo vs. Apartment: Which is Right for You?
Condo vs. Apartment: Which is Right for You?
By LLCR Staff

Chicago is a Great Place to Live, Work, and Play

Buying a condo or townhome in Chicago not only gives you access to extensive professional opportunities, exciting nightlife, and a legendary food scene, but it also makes you part of a historic (and ever-growing) community.

From the bars and boutiques of Old Town to the hustle and bustle of The Loop, wherever you decide to call home in Chicago is sure to combine the best of home, office, and entertainment.

So how can you go about buying a condo in Chicago? Sure, it can be a complex process just like buying a single family home, but as with any home purchase, the result is worth it. Let’s review the steps needed to buy a condo in Chicago.

Get Pre-Approved for Financing

You might be tempted to contact an agent right away, but getting pre-approved by a lender can actually save you a lot of time and hassle upfront.

If you’ve already done some research, you might think getting pre-approved is a hassle. However, gathering information early allows your lender to determine the loan amount you qualify for. And once you’re pre-approved, you’ll have a letter that you can use in negotiation with a seller to show that you’re ready and able to purchase the condo.

Here’s a quick overview of the documents you’ll need:

  1. Photo ID and Social Security card
  2. W-2s for the past two years
  3. Tax returns for the past two years
  4. Bank/asset statements for the most recent two months
  5. Pay stubs for the past 30 days

While additional documents may be required, particularly for self-employed borrowers or if you’ve had any recent credit events, getting this information ready for your lender will save a lot of time.

Make Sure the Condo is Approved

Getting a mortgage for a condo requires that the condo be on an approved list, such as for FHA and VA loans, or for the condo to undergo a review by the lender, such as for conventional loans.

For FHA and VA loans, you can get a head start to determine whether your condo is eligible for that loan type. Search FHA approved condos here, and VA approved condos here.

Condo lists for conventional mortgages aren’t extensive, but that doesn’t mean you can’t buy a condo with a conventional mortgage. Your lender needs to conduct a limited review, which involves sending the condo association some paperwork to fill out. The lender will review it, and if everything looks good, you’ll be all set.

Proceed with Final Steps

Once you’re pre-approved and have signed a purchase contract, you’ll return it to the lender and complete the loan approval process. The lender will verify the information in your application and submit the loan to an underwriter for final review.

If the underwriter requires additional information or explanations, you’ll be informed and should do your best to address these requests (called “conditions”) as quickly as possible so that your loan can proceed. Once conditions are cleared, your loan will be approved, and you’ll have the clear to close.

An escrow account will be set up to transfer funds between you and the seller. Your lender will also set up an escrow account for the distribution of fees like taxes and insurance. Condo association dues likely won’t be paid through an escrow account.

When the time comes to close on your condo, you’ll attend a meeting along with your agent, attorney, title agent, and any seller-side representatives. Be prepared for a long meeting. If you have any questions, let your agent and attorney know. They’re there to help you.

You’ll review your final Closing Disclosure and verify that everything looks accurate. You’ll sign a lot of paperwork and pay closing costs. When the loan funds, you’ll receive your keys to your new Chicago condo.

Ready to find your dream home? Contact our preferred lender today.

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