Purchasing a home is one of the biggest financial decisions that you will make in your lifetime. When it comes to homes, there are a variety of options and properties to choose from. While many prefer single family homes, condos are another great option to consider. Condos are often a great option for those looking for a home in an densely populated urban area. However, if you decide that a condo is for you, there are a few things to keep in mind. Here's what you should know.
Financing May Be Different
The first thing that you should be aware of when it comes to buying a condo is that if you plan on financing, it may be more difficult than you expect. There are more restrictions that come along with purchasing a condo. Many lenders, including Fannie Mae, Freddie Mac, the VA, and FHA require that the condo you are purchasing be 100 percent complete and finished with construction. Conventional lenders often require that 90 percent of the condos need to be sold before they will finance your purchase. It's important to keep this in mind when looking at condos for sale.
When buying a condo, you have to consider more than just your mortgage fees. Home Owner's Association, or HOA, fees will also apply. These fees cover the maintenance of common grounds, amenities, and other expenses.The cost of HOA fees will vary depending on the amenities offered and other factors. On average most pay between $200 and $300 for HOA fees each month. Before buying a condo, it's important to determine what the HOA fees will be, whether they will be increasing in the near future, and whether they impact the affordability of the condo.
Future Rental Income
While purchasing a home can be a great investment, chances are that you may want to move in the future. Employment changes, a growing family, and other life events may mean that a move may be needed. While you can sell your condo, it may make more sense to rent it out. If you are buying a condo with the thought of renting it out when you outgrow it, it's very important to look into whether or not this is a possibility. Your HOA may have restrictions on whether or not owners can rent out their units. It's important to consider this before buying.
If you are considering a condo, there are a few things that you should keep in mind. First, getting financing may be different than you expect and there may be some limitations. HOA fees are another thing to take into account. There may also be restrictions on renting out your unit in the future. For more information on condos for sale, contact a realtor in your area.