How Buying a Condo is Different from Buying a House

Buying a condo is different than buying a house in many aspects. The process of getting a mortgage is different; there is also home owner’s association to consider and other rules and regulations.

One of the important things to remember is that condos are individually owned and owners do not hold title to the land.  Also, due to the fact that most of the losses came from condo defaults after the economic crisis, they are viewed as more risky than other types of real estate. Thus, the process of getting a mortgage for condominium is more strict than for a house. The loan costs such as interest rates might be higher and also the loan requirements vary depending on the loan type. Also, for certain loan types such as FHA, the building must be approved as well. So if the building is not on the FHA list of approved buildings, it might not be approved.

Condo buildings have certain restrictions as to the use of amenities, etc. so before committing to buying a condo, make sure you know if pets are allowed, use of common spaces. Also, another thing to check is whether they allow it to be rented out in the future if you would like to. In addition, you will want to know what are the fees and what those fees cover as far as insurance and upkeep. You will also want to know if you are responsible for any repairs.

Despite the buying process that might be a bit more complicated that other types of real estate, there are many advantages of owning a condo, you just need to remember to do your due diligence before buying!


Flickr Creative Commons: Payton Chung (CC BY 2.0)
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