All About HOA's-What you need to know!

If you are considering purchasing a home that has an HOA, read this! HOA’s are different in every community so here is what you need to know.

HOA’s: What You Need To Know

Fees Vary: The fees that HOA’s charge are really different across the board. If you are looking at buying a home with an HOA, it’s definitely important to find out what the monthly HOA would be. Generally, the size of the community and what amenities the community offers affect the amount of the monthly fee.
Know What’s Included: What is included with an HOA is different within every community. Make sure that you ask questions to know exactly what you are paying for. Is snow removal included? How about any of your utilities? Each HOA offers different perks. Also, understand that you will be paying for any neighborhood amenities. This includes pools, clubhouses, tennis courts, etc. Decide whether or not you have the interest or time to use these things.
Reserve Funds: Each HOA is also different when it comes to reserve funds. Some monthly fees are set up to have a portion go into a reserve fund, while others do not. When a major expense comes up such as replacing the clubhouse roof or repairing the pool, a reserve fund could be used. If there is enough in the reserve fund to cover the expense, residents will not pay extra. If there isn’t enough of a reserve fund set up, the HOA may use special assessments to charge homeowners extra to cover the expenses. Please make sure to understand how the reserve fund works for the particular HOA you are looking at.

Finances and Mortgage Approval: Not only will you factor in the monthly HOA fee in your monthly budget, the mortgage company will do the same. They will factor in an HOA fee when determining how much you can borrow. If the HOA fee is fairly high, this may decrease the size of the mortgage that you are approved for.
Know The Rules: Each and every HOA is different when it comes to the rules for the community that they adhere to. Some are very strict while others may be more laid back. If you are concerned about living in a strictly regulated neighborhood, you may want to reconsider living in an HOA community. Some have rules regarding house color, the length of the grass, where you keep your garbage cans, basketball hoops, what you may store on your driveway, etc. Before you purchase a home, be sure to get a copy of the HOA’s rules and regulations.