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Getting a Mortgage Loan on a Single Family House

Mortgages and Chicago’s Single Family Houses

In the Chicago area, single family houses come in 2 flavors:

  • detached
  • attached.

Single family houses can be owned as condominiums. Most of the detached ones are not. In over 16 years as appraiser and loan officer,
I’ve only come across one group of condominium houses, in Hinsdale, IL.

Row-houses and townhouses, on the other hand, are often owned as condominiums. But that is not the problem. The problem is that many (most?) people (including processors) think that they are automatically condominiums.

In Illinois, the property identification number of condominiums ends in 1001, 1002, 1003… and so on. Properties that are not owned as
condos have 0000 as the last 4 digits of the PIN.

Call 847-235-6221 now to get ready for applying for a mortgage the right way.

What Makes a Condo a Condo?

When you own a property as a condo, you own the space between the floor and the ceiling, from the outside wall to the middle of the wall you share with another unit.

When you own a property not as a condo, you own the land below (and any mineral and water rights) all the way to China, practically, and the sky above, all the way to the Moon, practically.

Problems Getting a Mortgage on a Single Family House

Aside for the condo / not-condo confusion, the problems that arise when people apply for a mortgage on a single family house are due to
lack of preparation or unreasonable expectations.

They include things like:

  • property taxes have not been paid
  • cash deposits (lenders want paper trail; no paper trail, no allowing
    the money as either down payment, reserves, escrows, assets)
  • the property sits on 2 lots but the contract only mentions one
  • the property does not meet FHA minimum condition requirement and the
    borrower only qualifies for an FHA loan
  • insufficient credit
  • insufficient income (people often are not aware that unreimbursed expenses and meals and entertainment reduce the income that can be used to qualify).

Which are problems people who’re looking to get a mortgage on a 2-4 unit building have, too.

It’s best to talk to a loan officer early, so they can catch such items so borrowers can either correct or adjust expectations.

Call 847-235-6221 now to get ready for applying for a mortgage the right way.