I'm interested in buying a pre-construction condo hotel unit, however, I would like to only put down 10%. I haven't been able to find financing yet. How do I go about securing the mortgage rate? Can I lock in now for a property that I will close on in a year or two? Am I being unrealistic, or do I just need to continue to search for different lenders?

Let me see if I can summarize the key points of financing a condo hotel unit. Condo hotels are typically second homes and are therefore considered a more risky loan. The theory is that in bad times people may walk away from a property that is their second home, but not from their primary residence. For this reason, the lending rates are slightly higher. Most U.S. condo hotel developers request at least 20% down. Some require as much as 30%. Properties outside the U.S. may require even more. Usually the deposits are due in stages, often with the last payment coming due at closing. The developer wants to make sure that the buyer will have enough cash down that he will likely be able to get the loan. He does not want to get the property back and then have to re-sell it again. Unfortunately, you cannot lock in the rate today for a condo hotel that you will close on in a year or two when construction is complete. The good news is that today there are many more lenders willing to finance condo hotels than there were in years past, and more are joining the market daily. Therefore, rates and terms are becoming increasingly favorable as lenders fight for your business. When you are ready to talk with someone about financing, Condo Hotel Center has developed relationships with several highly-reputable mortgage brokers who specialize in loans on condo hotel units. Upon request, we will provide you with their contact information.

The above question was submitted via e-mail by a visitor to www.condohotelcenter.com. The answer was prepared by Joel Greene, a licensed real estate broker with Condo Hotel Center which specializes in the sale of condo hotel units and fractional ownerships in private residence clubs.