When a buyer is trying to get pre-approved for a condo unit we usually ask where they’re looking. Condominiums will typically have a homeowners’ association (HOA). This is because we have to factor in the HOA payment to the calculation. When it comes to a police home loan, we don’t want to underestimate the monthly payment. If we estimate the HOA at $300 a month and they find a unit with an $800-per-month association fee it’s going to mess up the pre-approval.
Generally speaking, condos are tricky. The words “condominium association” are loosely used. A buyer could be looking at a high-rise condo that has a completely different set of fees. There are other HOAs where utilities are included in the association dues. Those are usually very expensive.
In Chicago, you could find something like a six-flat that’s been gutted. Then they are sold as individual condominium units. Each unit pays a different association fee based on the size of the actual unit. A small unit may have a monthly fee of $200 a month but maybe the duplex beneath it has a fee of $500 a month. So, even the association dues within the same building can vary.
That’s why our job at Police Mortgage of asking the client or member the right questions is so important. Most of the first responders we have the privilege of working with are looking for single-family homes, rather than condominium units. So, HOAs don’t come into the equation that often. However, asking the right questions and understanding any HOA considerations up front is important to the process.
Police Mortgage specializes in conventional mortgages, purchase money transactions, FHA loans, and VA loans. Led by founder and CEO John Aretos, Police Mortgage is known and respected for providing clients with exceptional service, customized terms, quick and easy closings, and low money down options. To learn more about Police Mortgage, go to www.policemortgage.com or call 312-499-8878.
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