Starting Oct. 20, borrowers who put less than 20 percent down on a condo will have to provide documentation to demonstrate that the homeowners association is financially stable. The documentation includes a reserve study to show that the association has enough cash saved for emergencies, a request for proof that the association has adequate insurance and a questionnaire detailing the association’s finances
No matter how good a credit history you have, if the association of the building you are buying into is perceived as financially risky, your mortgage deal is dead.
The latest underwriting changes will also affect borrowers who are self-employed or receive most of their pay based on commissions.
As of Oct. 20, self-employed borrowers will be asked to submit two years of personal tax return when they apply for a mortgage. In order to use commissions towards your income you will have to been receiving them for the past two years. The same for bonus income.