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Mortgage Answers / Homebuying Decisions

How Do HOA Fees Affect Buying a Home?

The Short Answer

Homeowners association fees add to the cost of owning a home and may be part of the lender's review. Ask about regular dues, planned changes and special charges. The mortgage payment alone may not show the full cost.

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REGULAR DUES?

Add fees to the home budget.

An automatic yes
The details still need review.

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What do you need to know about the fees?

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I am comparing homes

Compare the mortgage and association costs together. A lower home price does not automatically mean a lower full cost.

  1. Get the facts

    Get the current association dues and ask which services they cover.

  2. Review the requirements

    Include those costs with the mortgage, taxes, insurance and other home expenses in your budget.

  3. Confirm your next step

    Ask the lender which association costs count in its review.

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A special charge is listed

A special assessment is a separate association charge. Ask what it covers, when it is due and how it affects the loan review.

  1. Get the facts

    Ask the association or property representative for the charge details and payment schedule.

  2. Review the requirements

    Tell the lender about the charge and ask whether more property or financial review is needed.

  3. Confirm your next step

    Review the purchase terms and full budget before assuming the listed dues show every cost.

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The fees may change

Association costs can change. Ask for current records rather than relying only on an old listing.

  1. Get the facts

    Ask for current association records and any notices of planned fee changes.

  2. Review the requirements

    Review what a change could mean for your monthly budget and other required payments.

  3. Confirm your next step

    Confirm the current figures with the lender and your real estate professional before relying on them.

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More than one path

Two things to separate.

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Regular duesACompare the mortgage and association costs together. A lower home price does not automatically mean a lower full cost.Details

Homeowners association fees add to the cost of owning a home and may be part of the lender's review. Ask about regular dues, planned changes and special charges. The mortgage payment alone may not show the full cost.

Other chargesBA special assessment is a separate association charge. Ask what it covers, when it is due and how it affects the loan review.Details

Association costs can change. Ask for current records rather than relying only on an old listing.

What Is a Mortgage Escrow Account?

A mortgage escrow account collects money with your payment for expenses such as property taxes and insurance. Those bills can change, so the escrow portion and total payment can change even with a fixed interest rate.

Can I Buy a Condo With a Mortgage?

A condo may qualify for a mortgage, but the lender reviews both your application and the condo project. The unit, building finances, insurance and loan program can affect the result. Ask about the project before relying on a price or letter.

What Happens If My Home Appraisal Is Low?

A value below the purchase price can change the loan and the cash you may need. Review the report with the lender and your real estate professional. Contract terms, possible price changes and any review of factual errors affect your options.

A few good questions

Are HOA fees always included in the mortgage payment?

Do not assume they are. Confirm how they are paid and include association costs in your full home budget.

What is a special assessment?

It is a separate charge from the association. Ask what it covers, when it is due and how the lender treats it.

Can association costs change?

Yes, they can. Ask for current records and any notices of planned changes before relying on an old amount.

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