What's a Condo?
So, you're thinking about buying a home and you've heard about condos but what's a condo?? Here's some information to help you understand what they are so you can make a good decision.
What's a condo? A condo or if you want to be formal, condominium, is a type of home ownership where, in essence, you own from the walls in. Once you open the door to your condo, you are responsible for everything inside. The exterior of your building and the land it sits on is usually maintained by the condo association.
What does a condo look like? When most people think of condos, they describe them as apartments that you own. They have definitely come a long way. Here in Northern Virginia, you'll find one level condos (apartments that you own), two level condos and even 3 level townhomes that are condos.
What does the condo fee cover? Each condo complex is different and if you buy a condo, make sure to read the condo documents to make sure you know what is included in the fee. What we find is that some condos will cover all utilities (gas, water and electric) while others will just cover water and most cover the exterior maintenance of the building as well as maintenance of common areas.
Why are condo fees so high? Besides the maintenance of common area and utilities, the condo association's job is to make sure that the exterior of the buildings are maintained. The only way they can do that is to charge you, on a monthly basis, what they estimate the cost will be. Sometimes there are large problems that they haven't anticipated and then they will charge a special assessment that is in addition to your regular condo fee. The condo fee also includes hazard insurance. The purpose of this insurance is to rebuild if a disaster occurs.
Why is the amount I can borrow for a condo less than a townhome? Your lender needs to factor in the condo or HOA fee as part of your monthly payment. Your house payment is broken down into Principal, Interest, Taxes and Insurance (PITI) plus condo or HOA fee. If your condo fee goes up, your Principal and Interest payments will have to go down which means that the amount you can afford will be less.
If the condo complex has insurance, do I need my own insurance? Yes! Condo insurance is usually inexpensive, similar to renter's insurance. It protects you in the event that your stuff gets damaged as well as providing you a place to live if your home becomes uninhabitable. The insurance that the condo complex has in place does not cover either of those issues.
Hopefully, you won't be wondering "what's a condo" anymore but if you have a question that I haven’t already answered, please feel free to contact me. Click search for homes to find your new home whether it's a condo, townhome or single family home
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