Purchasing a condominium differs from purchasing a single-family home. Aside from sharing walls and possibly cutting maintenance costs, buying a condominium (or condo) differs significantly from buying a single-family home. The vast array of logistics, financing options, and additional expenses may amaze you. If you're in the market for a condo, keep these four factors in mind before signing on the dotted line.
Condos aren't suitable for everyone
Some purchasers prefer living in a single-family home, while others prefer living in a condominium. You should determine your wants and preferences before purchasing anything.
It's a huge decision to choose your ideal neighborhood. The vast majority of flats, especially the larger ones, are located in urban or suburban regions. If you want rustic appeal, an apartment complex might not be the place for you.
You should also consider the type of community you want to be a part of. Apartment dwellers, who share walls, common areas, and amenities, have less privacy than traditional homeowners. Your living situation does not have a one-size-fits-all answer. Every homebuyer's experience will be different.
Finally, consider your preferences when it comes to home maintenance. Condos often require less maintenance, from sweeping driveways to emptying gutters. As a result, senior consumers or others who prefer not to get their hands filthy may find them appealing.
The mortgage procedure is unique
Condo financing is also a little different (Money Under 30, 2019). Lenders usually have more stringent requirements, such as the number of units, the number of investors following ownership, and the occupancy rate. You can choose between a standard, FHA, or VA loan, but be prepared to jump through some additional hoops, such as FHA approval, Department of Veteran Affairs approval, or a large down payment. The requirements will vary depending on the type of loan, the property you choose, and your financial condition, so be sure you know what to expect.
While you may face more stringent requirements when applying for a condo, keep in mind that financing discrimination is against the law. Start by informing your mortgage professional if you believe you are a victim of lending discrimination. You can also engage an attorney, file a lawsuit, or report the occurrence to the Federal Housing Administration if necessary (FHA).
There could be additional charges
The average home cost $241,700 in 2018, while the average condo cost $231,600. (Money Under 30, 2020). In most cases, a lesser down payment will result in a cheaper monthly payment and more potential savings. While a condo may appear to be less expensive, there are frequently hidden costs to consider. For example, you may need to join a homeowners association (HOA), purchase homeowners insurance, pay monthly fees, or manage parking or pet expenditures. Before you buy something, have a fair idea of the total cost, including any fees.
Not all condominiums are made equal
Of course, just as you would when purchasing a home, you'll want to find the right condo for you, not just any condo. Learn everything there is to know about the regulations, HOA, neighborhood, and building. You should also inquire about the noise level, take measurements of the amount of natural light in the flat during the day, and thoroughly inspect all facilities and common areas. If you own a car, you should think about safe and secure parking. After all, you are unlikely to have access to a normal driveway and garage.
There are various benefits to condo living, but you should learn everything there is to know before making a decision. In terms of finances and prices, these places are very different from conventional single-family homes. If you're still undecided, send me a message and we may discuss it more.