Date Posted: June 21, 2017
Frank Napolitano, Managing Partner at Mortgage Brokers Ottawa opens up the discussion by going over how many first time home buyers approach him with the intentions of purchasing a condo.
Condos, which typically have a cheaper purchase price than any other type of homes, are often a popular choice for first time homebuyers. Condos comes with less upkeep as well.
However, one important aspect many home buyers don't factor into their monthly housing budget, is condo fees. Despite your mortgage payment being cheaper with a condo than, a town home, once you factor in the condo fees into your budget, your monthly payment becomes much larger and in some cases, very similar to that one a freehold home!
Condo owners have little control over how condo fees are disbursed and how high they can increase. A inexperienced condo board can quickly deplete your condo fee budget and then require your monthly fee increase. In some cases, a higher condo fee can in fact lower the price of your overall condo unit, as high fees are not desirable.
Condos also have strict rules, which may limit you from renovating it to your desired specifications, once built.
A freehold townhome on the other hand, comes with much more freedom. A typically bigger home (more square footage) and no condo rules will allow you to renovate your home as please. History has also shown that freehold homes have a solid appreciation in value year over year, compared to condos, which have struggled in Ottawa and other major Canadian cities over the last year.
Before considering what type of home to buy, seek out professional advice from a mortgage broker. What you think is a more budget-friendly home may not be the case!