Re: 107% mortgages anyone use? - Posted by Dons
Posted by Dons on March 24, 2006 at 18:48:48:
Have you also considered the HOA monthly dues into your monthly expenses? What about additional assesments from the HOA? It can be quite a surprise to suddenly get assessed for $40,000 for you share of a new roof and blacktop for the entire parking lot!
It has happened to friends of mine. One couple I know found themselves facing a $60,000 assement for a new roof and all new composit board siding on the complex. Yes, they bought the condo for $137,000 some 13 years ago, the condo is in a resort and is now comping at $700,000. (Another unit just like theirs just sold for $700K…to a cash buyer!) But still they suddenly had to come up with $60K last year.
Does the HOA where you want to buy have a 10 year and a 20 year plan so they know how much money they will need over that time frame? If so, they can build future costs into the monthy HOA dues and help prevent these huge assesments. Otherwise, with a no-equity (even a negative equity) loan you could find yourself in a real financial hole.