Condominiums or "Condos" can be a great option for many home buyers that don't want all the added responsibilities that come with home ownership. There are pros and cons to condos just like with any other type of real estate. It really comes down to your lifestyle and if you feel like the pros out weigh the cons. Condos have Home Owners Associations that govern the shared or common areas of the development.
The Home Owners Association typically take care of all the maintenance and upkeep on the shared or common areas. These most likely are everything "walls out" and the home owner would be responsible for "walls in". This can be a great thing for you if you do not want to do all the work that comes with home ownership. However if the HOA is low on money or mismanaged, you can find that the complex looking old and outdated.
Many condo projects are gated and this adds a layer of security. If security is a concern for you or you live alone this could be an added pro for going with a condo. Even if the complex is not gated, you do have many other residents around that can make it feel more safe then a singe family home. You should always check crime statistics for the complex and the area you are looking buying in. http://www.city-data.com/crime/
Many condos have added amenities for all the residents to use and enjoy. Swimming pools, fitness centers, business centers, community clubhouses are just some of the amenities that a complex may have.
Some of the Cons of Condo Ownership
Living by others rules
Lack of Privacy
Homeowners Association Fees
Lack of Privacy
Some of the Pros of Condo Ownership
On the mortgage side of things Condos can be an issue with certain types for financing. For FHA and VA the condo project has to be approved in order for Mortgage Brokers to arrange financing using FHA or VA. Also when it comes to conventional there can be issues as well. Either a limited review or full review will be needed for all conventional loans per the DU automated underwriting findings.
Even on a limited review where there are less questions to answer, one of the questions asks about the amount of Non Owner occupied properties there are and the total number of units. If the Rental to Owner ratio is too high then you might be out of luck. Other alternative loan products have hit the market for these "non warrant-able" condos. The rates can be higher since there is a higher risk to the lender. Some local banks and credit unions may also underwrite these types of loans.
Here is an example Condo Mortgage Payment on a 400k purchase with 20% down and 250 Hoa Fee
You should talk to your Mortgage Broker before you make an offer on a specific condo to ensure that your chosen mortgage type will work for that project. Your Mortgage Broker will also be able to advise you on your buying power, credit score and total payments for the amount you are approved for. To find out how much you qualify for click here.
Here are some quick links to find condos that are for sale in Northern California.
Author:Sean Safholm BRE#01270334 Phone: 916-920-7000 Dated: September 20th 2017 Views: 303 About Sean: Sean Safholm started his career in real estate in 1999 when he was going to college to study real es...
Sean Safholm is a licensed Real Estate Broker in California. He is a real estate investor, broker, and seasoned mortgage pro. Sean has closed over 2000 transactions on the mortgage side of the business and a few dozen house deals for his own account. He has extensive knowledge on all sides of the real estate transaction and is here to assist first time buyers, move up buyers and investors with all their real estate needs.
The news came out a while back that Freddie Mac was suspending its new
"My husband and I were looking to buy a home and needed direction. We needed help finding the best area that was going to fit our family needs as well as finding a great loan that would fit our needs. We contacted Sean Safholm who was wonderful in taking care of us and helped us find the area that worked best for my family. He directed us to a new home subdivision that had the perfect house and met all the needs of my family.
He always answered all of our questions and picked up his phone every time we called. Even though he was not our real estate broker, Sean helped us with our financing to purchase our home. We feel we got the best deal in town with our mortgage. I priced/shopped rates with a few lenders and by far Sean Safholm beat them not only in price and payment, but also in customer service! I continue to recommend Sean Safholm to all of my family and friends.