When working with Wellington home buyers one of the first conversations we have prior to looking at homes for sale are HOA fees; Are they open to purchasing a home that has an HOA fee and if so will it impact their loan approval?
While many home buyers don't think twice about paying an additional $200 monthly HOA fee, especially when that fee includes cable, lawn care and amenities, it could be a deal breaker if they're obtaining financing.
Earlier this year I worked with a great couple who were approved for a $300,000 loan and the only Wellington communities they were interested in had HOA fees. However they were uncertain if their loan approval included HOA fees, so I contacted their lender.
After a quick conversation I found out the loan approval my clients received was based on finding a home with no monthly HOA fee. Knowing their favorite neighborhood had a $300 monthly HOA fee I asked their lender to provide an updated approval to include this additional monthly fee.
Within hours we received an updated approval for $240,000. Yes, just like that my clients went from a budget of $300,000 to $240,000 and purchasing a home in their favorite neighborhood was no longer an option. I know they were disappointed, but this is exactly why I ask countless questions and in some cases do additional research prior to showing homes for sale in Wellington. Had I shown them homes listed up to $300,000 in their favorite neighborhood I know they would have been crushed even more.
Wellington home buyers avoid heartache and find out if monthly HOA fees will impact your loan approval prior to looking at Wellington homes for sale.
Originally posted at http://wellingtonhometeam.com/are-hoa-fees-factored-into-your-loan-approval/
Michelle, suggested. Good for you for calling the lender to verify if an HOA fee was factored in. As your example shows it can really make a difference on what a buyers budget is.
It's always a surprise to find out what mortgage lenders factor into the calculations. I know that most HOA's provide services that everyone needs, but sometimes you wonder how it can cost so much.
Hi Michelle - Definitely! Some of our Homeowner Association Fee can be over $500/month so YES it does make a difference for a buyer who is obtaining a mortgage to buy their new home. Excellent post!
Michelle,
This is an excellent point how HOA need to be factored in, very smart figuring this out before you got started with your clients.
This is excellent information, Michelle. Buyers don't factor these fees in and when doing the monthly budget often don't include the taxes and insurance.
Michelle, this is great information for those that are on a tight budget. They need to understand the total cost of the home ownership experience.
Michelle, thanks for posting on an important topic. HOA fees can and do make a difference. Great information for ALL home buyers.
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