As I came up with the idea for this post, and started to put it together I realize it sounds like I am anti Association...
That is not true, but there are things to be aware of when purchasing a home the is in an association.
Beyond some of the obvious items that include rules you must abide by, assigned parking, and use of your property there are some less obvious things that you need to consider when buying.
- Hidden Fees: While not actually hidden, they are more of an "unknown" you need to ask about. Most associations have fees to join. The most common one is a Capital Contribution which can range from a few hundred to a few thousand dollars. While this can be painful when you buy, as an owner they will help to keep the association healthy in the future. In addition, if you are buying a condo and forms need to be filled out about the association- the association will most likely require you as the buyer pay for that upfront.
- The Monthly HOA Fee itself: This is a cost you cannot control, and is part of your housing expense. It will affect your qualifying as well. in todays market a $300 association fee is pretty similar to borrowing $55,000 in a mortgage. What does it cover? Are the amenities something you want/need?
- Restrictions: In my market one of the biggest restrictions, Age. We have a lot of retirement communities that require the occupant to be 55yrs + to reside in the unit. I often get clients that are younger looking in these neighborhoods because you do get a lot for your money in many of these communities.
- Condo's, and the health of the project: This is a bit of an unknown that is important. When buying in a Condo project you not only have all of the above items but you also have to be concerned with the project. When applying for a mortgage we will check on the health of the association. Most common problems will be: too high of a percentage of investors/rentals, to many owners late on their association fees, Litigation (where the association is being sued), and more (right down to new appraisal requirements for condos as well.) This is because you own a piece of the association as well, and that association directly effects the value of your property.
These properties are not bad and can be a great fit for some buyers, especially if you don't want to do exterior maintenance, but if you don't want to follow rules, they may not be a good fit for you.
Thanks for Listening!
I’d be happy to put my 30+ years of experience to work for you and your clients
Robert Rauf
Mortgage Loan Originator NMLS# 248937
http://www.homebridge.com/RobertRauf
or my blog: http://activerain.com/blogs/rrauf
Office: (732)908-4868 Cell (732)740-0175
RRauf@HomeBridge.com
www.RobertRauf.com
Since 1987 I have been helping my clients fulfill their dream of home ownership! HomeBridge Financial Services, Formerly REMN, HomeBridge Financial Services is located at 9 Grand Ave, Building 2 Suite A Toms River, NJ 08753. NMLS #6521. New Jersey Licensed Lender and Mortgage Banker #L041053. Visit www.Homebridge.com or www.RobertRauf.com for more information. NJ Mortgages, New Jersey Mortgages, Mortgages in NJ, mortgage in New Jersey, Mortgages in New Jersey, Toms River NJ 08753, Toms River NJ 08755, Brick NJ 08723, Brick NJ 08724 Mortgage in Ocean County NJ, Mortgage in Monmouth County NJ, Jackson NJ 08527, Howell NJ 07731, Lacey 08731 08734, Beachwood 08722 Bayville 08721,
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