Purchasing a condo or townhome: A townhome, pud (planned urban development), or condo are all basically the same because of ownership of the inside portion of the unit only, unlike a single family residence where you own the land, too. There is also a homeowner’s association fee (HOA) that is paid monthly – or semi-annually – yearly. You want to know how much that fee is and just what it covers regarding water, insurance, pool, ground maintenance, parking, roof replacement, reserve amount, etc. Make sure you carefully read the CC&R’s (all of the complex rules and regulations). In the area I cover, Southern California, I try to make sure that there is earthquake coverage built into the HOA fee. If an earthquake occurs and your complex becomes uninhabitable, you have just lost all of the money you put down for that unit and you might still be liable for the mortgage balance (always check with your mortgage provider), plus you have lost your place to live. Many newly constructed condos/townhomes claim that they were built to present earthquake standards, but I remember the 1994 Northridge earthquake and the steel girders bent in half at the Northridge Mall. Hopefully, you are, or will be, working with a knowledgeable realtor who will help you with your due diligence.
Always add that HOA fee amount into the amount of your monthly mortgage payment so you know just how much it will cost you each month. Each amount will be paid separately, one to your mortgage provider and one to the HOA, but you should know the sum each month.
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