That way there are no surprises when it comes to fees or restrictions for the property, she notes. Because townhomes are an increasingly common choice among first-time homebuyers, you might find yourself in a bidding war. Getting a low rate can save you thousands of dollars over the life of a loan. Keep in mind that the most favorable rates go to those with the best credit and least debt as a percentage of their income. You should always get preapproved before home shopping, says Kurt Johansson , senior loan officer for Shelter Lending Services.
Being preapproved offers a number of advantages. It gives you a better idea of what you can afford and can help you compete with other buyers. Plus, it helps you to determine if the HOA fees of a particular townhome will be too high. HOA fees are factored into the purchase price when qualifying for financing.
So, a high HOA fee could knock you out of qualifying if you are buying at the top of your range, says Johansson. Home inspections are just as important for townhomes as they are for detached single-family homes. Make sure the inspection includes both the inside and outside, even if the HOA takes care of the exterior, says Simmons.
And if any problems are found on the exterior, make sure they addressed and repaired before going through with the sale. Often, says Simmons, any exterior problems can be taken care of by the HOA. If the upkeep on these is poor, it will reflect badly on your home when you go to sell it. In addition, failure of your neighbors to maintain items like roofing and siding can can damage to your home no matter how well you keep up with maintenance.
First-time homebuyers living in densely populated metro markets may find townhouses a very good and affordable option, says Yun. They can also be a solid choice for anyone interested in a low maintenance lifestyle who wants a lock-and-leave property, notes Simmons. How We Make Money. Mitch Strohm. Written by. Edited By Bill McGuire. Edited by. It may have a deck or patio and terrace, small garden area, and more. A townhouse, though, is not a free-standing, single-family dwelling.
And like condos, they can help to keep the amount of upkeep to a minimal amount, with homeowner or association fees taking care of issues like sewer, water, paved areas, shared spaces, garbage, and more. Townhouses can be built as affordable homes, but also as high-end luxury properties. They can be very minimalist or part of upscale properties with pools, gardens, and more.
Check out our guide if you need a loan for your home improvement project. Building a townhouse is not a DIY activity and requires scores of experts to ensure that the entire structure is up to code, to the quality desired, and capable of being quickly sold or filled with long-term renters. Local costs have been calculated by accounting for labor and material cost differences across different cities.
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Townhouses have been around for centuries, but the number of new townhouse builds has been steadily declining in recent years. In , townhouses comprised 11 percent of single-family new construction, down from nearly 14 percent in , according to an analysis from the National Association of Home Builders. Still, townhouses can be a great option for homebuyers who enjoy living close to their neighbors. Townhouses are a style of multi-floor home that share one to two walls with adjacent properties but have their own entrances.
In the suburbs, townhouses are often uniform homes built in a distinct community that might have its own homeowners association. Newer urban townhouses might also have a uniform look and an association, but older townhouses in cities tend to be more traditional rowhomes that can stretch for city blocks with less-restrictive or no HOAs.
Condos can come in a range of styles, such as townhouses, a larger high-rise building with units on each floor or a garden complex of one-story units. Condos are individually owned, but might also be rented to tenants. Apartments, by comparison, are typically commercial rental units owned by a corporation, and everyone in the complex rents — although in some places, you can own an apartment and rent it to tenants, as well.
Make sure your budget includes not only the cost of the property itself but also your HOA payments, if applicable. Keep in mind that townhouses are subject to the ebb and flow of the broader real estate market, which means that prices have risen sharply over the past year.
The limited supply of available inventory means that a townhouse — just like other properties — will cost more in You probably already know what you want from the house, in terms of bedroom size, layout and other factors. Ask them what they like about the area and if there are any HOA issues you should know about.
The good news is that there are lots of options from different HOAs, so you can find the right one for you. While a townhouse may make sense for you now, multi-floor living may not work for everyone and at all stages of life. How We Make Money. Beth Braverman. Written by. Beth Braverman is an award-winning freelance journalist and content producer, writing mostly about personal finance, parenting and careers. Edited By Suzanne De Vita. Edited by.
Suzanne De Vita. Suzanne De Vita is the mortgage editor for Bankrate, focusing on mortgage and real estate topics for homebuyers, homeowners, investors and renters.
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