What kind of animal is a Condhotel?
Much like the name implies, a condhotel is a condominium that offers lodging to the general public like a hotel. Unfortunately, if your agent is inexperienced or not familiar with condos, you may never run into this term until you go for financing, which is why I strongly recommend seeing a lender BEFORE writing an offer. If you tell your lender which project you are considering, they will tell you if it is a Condhotel or not. Why is this important to you? A condhotel will cost you more money because a lender views a property open to the general public as carrying a greater risk than one that is totally privately owned. The “cost” to you can be from one to two interests point higher and/or one point higher than the “going rate.” I also recently found out that one lender no longer offers any financing on jumbo loans for condhotels at all!
There are several condo projects in Princeville: Hanalei Bay Resort, The Cliffs, and Alii Kai Phase II that may be considered condhotels by your lender. Notice the word “may” as not all lenders view the condhotel criteria the same way. While some lenders consider a complex a condhotel if it has a front desk, others look at the presence of maid service and commercial space as the condhotel criteria.
If you are considering purchase of a condhotel, I strongly recommend that you contact several lenders with the name of the condo complex and see what they can do for you. Some lenders are no longer offering “second home” loans on condhotels and will only finance it as an investment property. As you probably know, an investment property has a higher interest rate than a primary residence or second home, and if it is a condhotel in addition it dramatically impacts the going rate. As of today (12-27-07) one lender quoted 6.25% and 1.5 points on a conforming investment loan (under $625,500) while the same loan for a condhotel is 8.25% with the same points. If your agent is experienced in condhotels, he or she should be able to refer you to lenders who work with condhotels.
If you have any questions about any of the condo complexes on Kauai, do not hesitate to ask. If I don’t know the answer, I know the people who do–
Just so you know I’m not all work and no play, here’s a picture from my November hike in Hanalei and one of the views. I’ll write more on this great hike later.
Aloha, Elaine
Elaine Schaefer (R, GRI, ABR)
Broker in Charge – Princeville Resort Office
Graduate, Realtor’s Institute
Accredited Buyer’s Representative
Top Producer 100% Club
RE/MAX Kauai
Princeville Resort Office
POB 223632
Princeville, HI 96722
cell: 808 639 2935
home fax: 1 808 440 4552
email:soldonkauai@yahoo.com
website: www.kauairealestatenow.com
blog: www.blogs.alohaliving.com/princeville-condo-sales
……you can have your own piece of paradise
ask me how!
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