Condo Mortgages

For some potential buyers, purchasing a condominium rather than a home just makes more sense. For those that don’t want responsibilities like leaky roves, plumbing problems, or keeping up a lawn, sharing the burden may sound much more appealing. This is exactly the case with condominiums. These multi-unit living alternatives first came in the form of apartment complexes that converted into permanent living, and they are now built with permanent living in mind. The space and comfort provided in many modern condos is very competitive to that of an actual house, and the advantage of permanent living versus renting a space is similar to renting a home versus purchasing a home. Instead of paying money every month into someone else’s investment, you are now contributing to your own mortgage, thus building equity and providing for a more secure future. Most people purchasing a condo will do it with the help of a mortgage, similar to most that buy a house, and though there are many similarities, there are some slightly different variables to consider when purchasing a condo unit.

Houses are considered to be larger investments in scale. This is due to the fact that home sale prices are usual higher than condos and thus the appreciation is somewhat greater. Of course, this is a gross generalization, as there are some condos that are worth far more than certain houses. But when comparing similar spaces, locations, and types of construction, home prices are generally more expensive. Apart from the actual sale price however, condos also require residents’ fees, which cover the maintenance expenses associated with keeping the complex in operation. These fees are collecting into an account known as a reserve fund to then be used for maintenance costs. It is very important to obtain information about this reserve fund before beginning the mortgage process. You should be able to request information about the balance of the reserve fund directly from the Condominium Board of Directors as well as the costs of scheduled repairs or maintenance. Some condo associations or boards have gotten themselves into a financial mess that you do not want to walk into. You will also need to factor in the cost of condo fees with your mortgage payment to determine what you can afford to pay on a monthly basis.

If the fees are reasonable and the reserve fund is healthy, you may be ready to make a purchase, assuming you like the unit and its location. At this point, you will go through the exact same steps as acquiring a home mortgage. Everything, down to the interest rates and the actual paperwork should be the same. If you are still shopping around, feel free to get some mortgage quotes from several brokers before you decide on the right one.

About the Author: Peter Dellane is the President of Ability Mortgage Group, LLC, A leading Maryland Mortgage broker company offering low costs zero point mortgages. For more information on about Ability Mortgage group and programs please visit www.marylandsmortgage.com.