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Quality HOAs make condo ownership a little easier

Here in the High Country we have a many condominium complexes and Planned Unit Developments so therefore we have many Home Owners Associations (HOA). The associations are in place to oversee the common aspects of the association such as making sure that insurance is in place with some HOAs even paying for sewer, water, all exterior maintenance and basic cablevision. So the HOA where you are considering the purchase of real estate is a very important and you should know what it provides.When you are looking at a piece of real estate your realtor should be able to provide you a list of the items covered by the HOA and the amount of the monthly HOA fees. Keep in mind that the HOA fee is part of your monthly cost of owning and the fee will be included in determining your financial ability to pay the bill.Also, if the HOA does provide items such as exterior maintenance, cablevision, heat, water, and sewer and possibly even a clubhouse with a swimming pool and hot tubs you as a buyer have to pay the entire monthly fee. If you think that you will never use the amenities offered by the HOA you will still be responsible for them and you will pay for them. When I am putting together a file of a potential borrowers I estimate the monthly principal and interest (P&I) payment plus the cost of real estate taxes and home owners insurance. Plus, if the property has an HOA I must also include the monthly fee. As an example if the P&I is $1,500.00 per month and the taxes and insurance are another $250.00 I would submit a figure of $1,750.00 to the Underwriter if there were no HOA. If the property being purchased had a monthly fee of $250.00 I would add that into my bottom line figure. In addition, if the HOA monthly fee included the Property Insurance I would subtract the cost of the Insurance. In this case the monthly costs add up to $2,000.00 and that is what I would use as the monthly total.Now I know that some of you are thinking that since the HOA fee includes items such as trash removal and cablevision can the HOA fee that is reported to the Underwriter be reduced to show just the Insurance costs? Unfortunately the entire monthly HOA fee must be used, as it is difficult to just segregate only the Insurance costs. As a potential property owner you should know who the Management Company is, if any, you should have access to the last few Home Owners Association meeting minutes and last but not least you need to have your realtor find out if there are any special assessments currently due or being discussed for in the not too distant future. And, look at a copy of the current year budget. If the Association does not have cash in the bank to pay for emergencies you just may want to look elsewhere for a home. For answers to your mortgage related questions call Bob Kieber at (970) 262-1199 or e-mail him at rkieber@comcast.net. Bob is a local mortgage lender and principal of Resort Lending. He has 30-plus years of professional experience in real estate, finance and investments, and is a longtime resident of the High Country.


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