Kingston Mortgage Explains Homeowners Association (HOA)
When searching for their property, perspective homeowners will find that some developments have an HOA, or Homeowners Association. Although the organization is helpful overall, the HOA fees and how they can affect a budget can be a surprise to some home buyers. If you wish to learn about HOA, read this article from Kingston Mortgage professionals.
What is HOA?
HOA stands for Homeowners Association and affects those who live in any planned development, such as condominiums, townhomes, and single-family homes. The HOA will take responsibility for the maintenance of your surroundings and any shared amenities. The Homeowners Association uses monthly HOA fees to ensure the maintenance of the community is upheld.
How much are the HOA Fees?
HOA fees vary widely across developments, cities, and states. Some developments charge $200 per month while others charge $450 per month. Factors that determine the price of the HOA fees are which community you chose to live, the type of neighborhood you’re in and how many properties are within the community. HOA fees can even vary within a single development. Examples of properties that could be charged a higher HOA are those with large square footage, location, and orientation. It is also common for HOAs to charge a little extra in order to build up a reserve.
What is included in the HOA Fee?
In short, the answer is it varies. In general HOA fees cover the cost of maintaining the gardens, sidewalks, gates, and the exterior paint of the community. However, at times, the HOA fee can also include utility bills such as trash, sewer, and recycling as the community’s collective utility bill. The services included in the HOA fee vary because each development offers different maintenance services for their individual outdoor and communal space. For example, a development which offers tennis courts will have the extra maintenance cost of redoing the tennis court surface compared to a development that does not have tennis courts. It is also important to remember that with more outdoor amenities, certain insurances may be required which can increase the HOA fee. For example, at times special insurance is required for swimming pools and tennis courts.
How will HOA affect my Mortgage?
Mortgage lenders will take into consideration the Homeowners Association fee while they process your paperwork. Since HOA is a monthly cost, mortgage lenders take it into account when approving an amount for you to spend on a home. Higher HOA fees will leave you with a smaller budget for the actual property.