Condos can be a great way for first-time homebuyers to enter the world of homeownership and start building equity. Besides the obvious differences in living in a shared building vs. a stand-alone property, here are some things to keep in mind.
First, condo interest rates are usually higher. From a lending perspective, the higher the risk of the transaction, the higher the rate will be. For condos, there are multiple owners of the same building, compared to a stand-alone home that only the borrower owns.
Secondly, for a SFH, you have to pay homeowners insurance. For a condo, there is always a master policy that is paid through the HOA that covers common areas. If that policy doesn't have "walls-in" coverage for each unit, you will be required to get an H06 policy which provides "walls-in" coverage for your unit. This type of policy is inexpensive compared to a SFH homeowners insurance policy. A less expensive policy means less money is impounded in your escrow account, so there's less money you have to bring to closing
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