Purchasing a Condo in Fort McMurray?
Defined in the Condominium Property Act there are two types listed below.
Conventional Condo: This is where units are part of the building and are the private to the individual owners. Apartment style condominiums are a good example of this. The area you own is only your specific unit defined by the flooring, walls and roof. Any area outside these boundaries are common property and owned by all unit owners within the condominium. The shared fees for these types of condos generally include heat as they have to heat the whole apartment building.
The unit owner of a conventional condo is individually responsible for the interior of their unit, but shares in the responsibility of the common property along with the rest of the unit owners in the complex.
Bare Land Condo: A Bare Land condo you own the land and your home. In a bare land condo you would be responsible for condo fees to cover common areas such as the road maintenance, sewer mains, water mains and snow removal.
Areas outside the lot are shared and owned by all condo owners much like the conventional condo. A duplex and single family home are good examples of this because the unit is not restricted to just the building they include land. Bare Land Condo’s are not just for attached properties (townhomes or duplexes). Single family houses can be considered Bare Land Condominiums.
Condominiums are desirable for the low maintenance, made possible by condo fees and the condo board hiring staff to do the maintenance on the common areas. They vary from apartment style, town homes, and sometimes mobiles or homes on a bare land condo. A condo property is looked after by the condo board which is usually the residents of the condominiums and ran by a property management company. The condo board collects fees, and budgets those fees accordingly for the maintenance of the common areas, repairs, insurance and collects fees for future repairs determined by a reserve fund study.
If you are purchasing a condominium as your main residence, you can do so with as little as five percent down payment. The difference of financing a condo as opposed to a freehold property is that the condo fees must be included in the property details when qualifying for the mortgage. When purchasing a condo in Fort McMurray 50% of the condo premium must be added to the debt for qualifying purposes. This means if you were pre-approved for $300,000 and decided to purchase a large condo for that price instead of a single family home, chances are you would no longer qualify due to the condo fees. A good way to determine with condo fees the amount you can spend is every $100 condo fees reduce the pre-approved amount by $10,000. For example if you qualify for $300,000 and then find a condo with $400 condo fees a month you would be able to spend $260,000 with $400 condo fees rather than the full $300,000.
When purchasing a condo be sure to get a copy of the condominium documents and read over them carefully. You will find their budget, current audited financials and reserve fund study to show the financial strength of the condo along with current bylaws. Some condominiums will not allow pets, have restrictions on outdoor furniture/decorations, visitor parking etc. It is important for you to know exactly what is allowed so you can make the appropriate choice for your future. You can hire a condo review company to assist you in reviewing the condo documents.
If you have any further questions do not hesitate to reach out to the team here at Whalen Mortgages your Fort McMurray trusted brokers. We work for you Not the Banks! 780-715-7533