When you purchase a home, there are many factors your should consider. You need to find the best mortgage rates in Canada, and evaluating a neighbourhood with HOA is one of them. Before deciding if you want a home with HOA, ensure you understand how they work well.
What is an HOA?
HOA or Homeowners Association is an organization in a subdivision, planned community, or condominium building that makes and enforces rules for the properties and residents. When you are a member of an HOA, some fees come with it. Your payments will be determined by:
- Types of properties
- Number of properties in the group
- Operating expenses
Depending on your neighbourhood, fees usually range from $100 to $200. Costs also often contribute to the association’s reserve funds, which are set aside for major renovation projects or emergency use.
HOA also charges fines on homeowners who break the rules or damage the common areas. They can also place a lien on a property if a homeowner falls seriously behind on their dues.
There are pros and cons to being a member of the HOA.
The pros include:
- Provide amenities- if you are a member of an HOA, you can access amenities within your neighbourhood. Like tennis courts, pools, or fitness centres.
- Reduce responsibilities- the fees you pay for HOA aren’t for nothing. They also do services that you don’t want to do yourself. For instance, snow removal.
- They help keep appearances- there are rules you should follow in an HOA. These rules typically include proper ways to maintain your home. To prevent neglect in your own house.
- Maintain the home’s exterior- some associations also maintain the home’s exterior within the community. However, their capabilities are constrained. You are still responsible for wall repairs or changing doors or windows.
- Mediate problems between neighbours.- in the neighbourhood, conflicts are a common thing to happen. HOA mediates conflicts and finds a solution that works for both parties. It is to maintain peace and order within the community.
On the contrary, here are the cons:
- Can foreclose a home- if you fail to pay your monthly fees, they can foreclose your house. They can place a lien on your home if you are behind your fees.
- May stop you from renting your place- they can put an array of rental restrictions.
- You have to pay monthly fees- a neighbourhood with HOA comes with monthly payments. Your payments will go towards the association’s funds, which are mainly for the maintenance of your community.
- Defaulting on HOA fees has repercussions- as I’ve said, if you ignore your monthly fees, your house can be a candidate for foreclosure. If your community doesn’t allow foreclosing, the amount you will have to pay can hurt your wallet.
- Imposes rules and regulations- if you are in a community with HOA, there are rules and regulations that you need to follow. They can be strict, but it will depend on the association. They will then decide on the colour of your door, how many vehicles you should park, or even the outside decoration of your house.
Did that help you decide if a community with HOA is the best for you?
You can take your time purchasing a home. It would be best if you thought about what you want to buy. It’s anything but a choice that you ought to trifle with. We can find you Canada best mortgage rates.
If you decide to move to a community with HOA, here are some key points you need to review.
- Governing Documents- make sure you review their governing documents. Their rules and regulations, HOA’s bylaws, amendments, covenants, and articles of incorporation. You must meet halfway with the association before moving or building a new home. Also, you should pay attention to items concerning individuals’ homes.
- HOA’s Financial- check if they have organized finances. See their most financial statement if they are well funded. You don’t need to be an accountant to see if there is something wrong with their finances.
- Know where your monthly payments go- see the inclusions of your monthly payments. Does it include garbage collection, snow removal, community events, or maintenance? You ought to be aware of where your money goes.
Buying a home is a crucial decision. It takes a lot of effort to move to a new place. So examine the house well. Don’t look at it for five minutes and say, this is it. Buying a home doesn’t work like that. Give everything a second thought. Shop for homes and calculate costs, interest, purchasing price, and everything you need to pull out your money.
If you’re concerned but don’t know where to begin. We got you! We can find you the best mortgage interest rates Canada. Making your future home into the present.