Financing Tips for Buying a Condo

Homeowners get tired of the responsibilities involved. First it's a leaky roof. Then it's a plumbing problem of mysterious origin. The last straw is usually when the septic system backs up. Finally, you realize that moving into a condominium and sharing the responsibilities of your "home" with others could solve most of your problems.

Condo basics

Originally, condos were apartments that were converted into permanent living units with owners sharing common areas-grass, hallways, laundry rooms, pools, etc. Nowadays, condos are designed with permanent occupancy in mind. Often, the interior of a condo is just as deluxe and spacious as a single-family home.

Houses often have a higher sale price, as well as a higher rate of appreciation. On the surface, this seems like an argument for buying a house; but sale price and appreciation don't address maintenance costs. With a condo, all the owners share expenses and pay for them out of the reserve fund-a pool of money made up of the residents' fees.

Financing a condo

Before buying a condo, investigate the reserve fund. Most condos have a Board to collect fees and keep records. You can request information directly from them about: a) how much cash is in the reserve fund; b) costs of scheduled repairs and maintenance; and c) any special rules or bylaws that the condo board has passed. If you find all the conditions agreeable, you may want to buy.

You'll go through the same process to finance a mortgage for a condo as you would for a house purchase loan. Paperwork and mortgage rates will be identical, and you can get mortgage quotes from any reputable lender in person or over the Internet.

Condominiums offer an equivalent living space to that of a single-family home, but without the worry of bank account-shattering repairs. Once you find a condo that you like, find a competitive mortgage rate loan and introduce yourself to your new neighbors.