If you’re considering purchasing a home and want that feeling of being part of a community, you might find that it comes with an extra price: the HOA fee. HOA stands for “Home Ownership Association,” which is generally a board that manages rules, regulations, and fines to keep the community functioning in an agreed upon capacity.
HOAs often hold meetings (usually monthly) to discuss HOA collection fees, what the HOA will do with the money, and other administrative business. Sometimes, a community with an HOA will undertake a large project, such as building a community space or installing a tennis court. In this case, the HOA undertakes the project and uses the collected funds to complete it.
The average daily mortgage interest rate for Monday, January 22, 2024 is 6.87% for a 30 year fixed rate. The rate fell 0.05% from the last update on January 19, 2024 and rose 0.19% from December 2023. This information is sourced daily from correspondent, retail, and wholesale lenders located in the United States.
The average daily mortgage interest rate for Monday, January 22, 2024 is 6.23% for a 15 year fixed rate. The rate fell 0.04% from the last update on January 19, 2024 and rose 0.18% from December 2023. This information is sourced daily from correspondent, retail, and wholesale lenders located in the United States.
What to know about HOAs before buying a home
It can be rough to find a home you can afford only to realize that it comes with an HOA fee of several hundred dollars per month. When you have an idea in mind of what you can afford on a monthly basis – and a pre-approval from a bank – HOA fees can really throw a wrench into your home ownership plans.
HOA bylaws stipulate if, how often, and when HOA fees can be increased, as well as the process for increasing them. It’s important to get this information from your real estate agent before agreeing to purchase a home in a community with an HOA.
Are HOAs worth it?
Whether it’s worth it to purchase a home with HOA fees depends on the nature of the bylaws and your own needs. HOAs can be handy – they establish a set selection of colors homes can be painted, in some communities, and discourage residents from keeping overgrown lawns. If you like things neat and tidy, an HOA can handle that in your community, along with disputes between neighbors.
However, the first-time homebuyer looking at a condo might not feel so warmly about HOA fees. What might look like an affordable first home could come with rising fees and little action – so it’s worth investigating and consulting your real estate agent regarding.