Condominiums are typically seen as the option of convenience. However, although you’re guaranteed a more reasonable price than most suburban, single-family homes, there are other costs you should consider first. The most obvious one, is, of course, the mortgage. Condo mortgages are fascinatingly different from their counterparts in apartments and single-family homes. If you’re looking for condos on the upper east side with park views, and you want to know more about condo mortgages so that you know what you’re getting yourself into, here are the basics on condo mortgages.
#1. You may have a higher rate
Mortgage rates on condos are typically much higher than what the same borrower would be paying if they were chasing a single-family home on the same terms. The reasons for this are plentiful, but one of the main reasons is that mortgages for condos are considered riskier somewhat than single-family home mortgages. The rate will typically run an eighth to a quarter percent higher than single-family home rates, but you can avoid this altogether by just paying the percent up front out of pocket, and now there is no problem.
#2. You might need a larger down payment
Some lenders are going to require you to put at least 20 percent extra down on a condo as a minimum. However, depending on the state you’re in, that actually may not be the case. If you’re looking for a condo in, say, Florida or Nevada, then yes, you will need that larger down payment. But most other states don’t have this problem. Look up condos in the state you live in and see if you’re going to need a larger down payment.
#3. Association fees
Condos, regarding initial payments and even mortgage costs, tend to cost less in the long run than single-family homes since condos are so much smaller than their single-family counterparts. However, that difference made up for and then some by association fees. Simply put, the home-owner’s association of your area is going to demand payment for you living in your condo, as they govern the area. These fees can range wildly from one another, costing anywhere from below $100, to more than $500 a month. Luckily, these amounts are not a mystery to learn, so the amount of HOA dues you’ll need to pay per month should definitely be one of the first things you find out about a condo before you decide if you want to live there. For more information visit 252 East 57th .
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