Should you buy a condo? Let’s explore some of the perks of condo living to see if it’s a fit:
1. It’s affordable.
This is what crosses most homebuyers’ minds when they contemplate a condo purchase—a condo is likely to be cheaper than a house. But how much cheaper? Recent data from the National Association of REALTORS® (NAR) shows that a median-priced condo may cost you $354,600, compared to $413,500 for a median-priced single-family house.
Saving over $50,000 (based on median prices) on your purchase could lower your monthly mortgage payment. Just keep in mind that monthly condo association fees may apply, averaging around several hundred dollars a month to cover maintenance and amenities.
2. It’s low maintenance.
Speaking of maintenance, lightening your home maintenance load is one reason many buyers gravitate toward condos. When you buy a condo, a condo or homeowner’s association (HOA) is typically responsible for most exterior upkeep. This might include landscaping, shoveling and clearing walkways, and maintaining roofs.
Condos are akin to apartments in this way and may be attractive to you if you don’t want to shell out thousands for exterior repairs, i.e., around $9,192 for a new roof.
Fun fact: The first condos were built in 1960 in Salt Lake City.
Chat with your local Academy Loan Officer to find out if a condo is the right choice for you.
3. It has amenities.
What else might your HOA fees cover? Your condo complex may come with built-in amenities, like a pool, gym, dog park, clubhouse, game room, and even a rooftop deck. Some of these features may also be money-savers; though you’ll be paying a monthly HOA fee, you may no longer have to pay for a gym or pool membership.
You, like many buyers, may appreciate these “extras” if you’re looking for added security. It’s not uncommon for a condo complex to have gated entry, a doorperson or security checkpoint, and surveillance cameras in common areas.
4. You may have more options.
With housing inventory hovering around record lows, you may be having a hard time finding any listings that meet your needs in your area. Including condos in your search criteria could turn up many more choices.
Some homebuyers might also choose to buy a condo as a starter home so they can enter the market. Home prices—and home equity—have been increasing. Buying a condo may give you the chance to become a homeowner and quickly begin building equity that you can later use to trade up and purchase a house. Connect with your local Academy Loan Officer to find out if this is a smart option.
5. You can join a community.
As soon as you buy a condo, you become part of a small, independent, and localized community. If you’re single, older, or new to the area, this can be a big draw. Condo associations may often throw residents-only events, providing an opportunity to socialize. You’ll also share communal living areas, which can make it easier to make friends.
This may be why those living in condos and housing co-ops continue to say they’re satisfied. The majority of residents express that they feel like their association is looking out for their community’s best interests.
While condo living has its benefits, there are still considerations:
- HOA fees. A lower sales price is attractive, but make sure to factor in additional monthly HOA payments. Your Academy Loan Officer will include these monthly payments when calculating the loan amount you may qualify for.
- HOA risk. Your Academy Loan Officer may assess risk by looking for the presence of litigation involving a condo’s HOA. An HOA’s financial condition is also important: HOA budget and reserve studies will be analyzed for minimum reserve fund requirements to ensure the building can be maintained.
- Potentially higher interest rate. Another factor that impacts affordability and monthly payment is the added cost associated with your mortgage interest rate. A mortgage for a condo can typically have a higher interest rate to reduce the discount points paid at closing.
- Stricter approvals. Getting approved for a mortgage on a condo may be more complex as the approval depends on the development—not just the unit. Searching FHA- and VA-approved condominiums is a good place to start. Your Academy Loan Officer can walk you through the approval process.