When it comes to owning your own home, condominiums are quickly becoming a much more preferable option as opposed to normal, single-family homes. Prices only continue to rise by the day for normal suburban homes, so the cheaper alternative condos provide is quickly beating down whatever bad sides they may potentially have in the eyes of the consumers. However, there are some notable differences between buying a normal, single family home and buying a condo. If you are looking for any condos for sale in San Fransisco CA, you may be expressly interested in these differences. So, here are the need-to-knows to financially prepare yourself for buying a condo.
#1. Important terminology
Before you do anything, you should know the terminology so that you and your agent will both be on the same page when they start talking business.
PITI: An acronym for Principal, Interest, Taxes, and Insurance. This is a way to look at your total monthly mortgage payment, including the carrying costs associated with home ownership.
HOA dues: This refers to any payments you owe the homeowners association. Your HOA costs can range from anywhere in the ballpark of$80-$500 a month. The exact amount will vary from the home you’re looking at.
PMI: Another acronym meaning Private Mortgage Insurance. If you are buying any property for less than 20% down, this insurance should be considered mandatory. This will be included in the PITI as a part of the overall HOA payment.
#2. What is the HOA
If this is your first condo purchase, then there’s a good chance you’re not that familiar with the homeowners association. An HOA is a legal entity, a governing body of sorts comprised of the board of directors. They control the budget of the complex you’re living in, or the community your condo is located within.
#3. Quick cost breakdown
Going into the specifics of the costs of a condominium vs a single-family household would take hours, so this will be kept as simple as possible. Overall, a condo is expected to be significantly cheaper than a single-family house, although the mortgage cost may be higher (although even that is subject to change over recent years). However, while initial buying price may be cheaper, there’s also the monthly cost from the HOA, which tend to be much higher than single-family homes. This is one of the reasons it’s preferable to hire an accountant before sifting through all of this, as they have a much deeper understanding of the complexities of the price. For more information visit The Austin.
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