When deciding if you should live in an HOA community I think you should first understand what an HOA is. HOA stands for Homeowners Association that is essentially a structure put in place to keep a neighborhood cohesive and clean. The members creating the “rules” are usually elected into their roles, and most of the time there is a monthly or annual fee.

What are the advantages of living within an HOA community? 

Included in the cost often times is lawn maintenance, utilities, and amenities such as golf courses and pools. You also may have more neighborhood social events.

What are the disadvantages  of living within an HOA community?

You will have to follow a multitude of rules from parking to your home’s appearance. The fee can also get pretty expensive depending on the area. There is also a chance you could have a poorly managed HOA which could result in less communication and more complications.

Whether or not you should live in an HOA is completely up to you – be sure to weigh out the pros and cons and decide whichever aligns closer to the lifestyle you hope to achieve the next time you buy a house.

In the average 3%-6% of closing costs that you are paying – what you are paying for can vary per deal. Here are the main types of fees paid for at closing:

Application fee, attorney fee, closing fee, credit report fee, escrow deposit, upfront PMI, HOA fee, homeowners insurance, lenders title insurance, point fees, title insurance, origination fees, appraisal fee, property tax, rate lock fee, recording fee, realtor commissions, tax status research fees, title search fee, and underwriting fees.

Now take a deep breath – I know this sounds like a lot (and it is,) but as I said each deal varies and it’s unlikely that you will have to pay for all of these things at one closing. Keep in mind that the average closing cost payment is about $3,000-$4,000 in Wisconsin.

Earnest money is a deposit you make apart of your offer. The main idea of earnest money is to show a seller that you are buying their home with “good faith,” and that you will perform on your side of the deal. Earnest money can be anywhere from 1%-3% of the homes purchase price and is typically delivered to the listing agents office within 3-5 days of an accepted offer. If the deal goes smoothly and you proceed to close, that earnest money will go towards your down payment and closing costs.

However, if you do not perform on your behalf and miss important deadlines or back out of the deal with no supposed reason – the seller can fight to keep that money. But this is what we have contingencies in place for, to protect you if anything is to go wrong on the deal. If you have followed all of the rules of the contract and the seller is refusing to agree on terms – you won’t lose your deposit.

Let’s talk about the four main home loans – because as you will see, down payments vary depending on which loan you qualify for.

As you may know, a conventional loan is typically 20% down and is considered an ideal loan type. It is beneficial to have lower monthly mortgage payments and can be the next-best-thing to paying all cash for a deal – however for some, paying 20% of a homes purchase price is not feasible and that is okay!

You’ve also probably heard of an FHA loan before which is made specifically for people who may have debt or lower credit and allows it’s loan users to purchase a home for 3%-10% of a homes purchase price. However, the home must pass inspection and appraisal requirements, you will also end up paying more monthly on top of a required Private Mortgage Insurance (PMI.) 

Now let’s talk about VA loans and USDA loans – both which let you put as low as 0% down.

VA loans are made for Veterans, Service Members, and Select Military Spouses that qualify a long list of requirements. These loans may sometimes come with lower interest rates, but you cannot buy investment or vacation properties with this loan, and you will also need a property inspection and appraisal done.

USDA loans, like VA loans, are likely to have lower interest rates. USDA loans give the opportunity to people with lower to average household incomes to buy rural properties. You can find which areas are covered by USDA loans through this link.

Overall, I’m sure you understand how much a down payment can vary depending on your situation and qualifications, but speaking with a lender is the best way to find out what is best for you moving forward. 

Contingent vs. pending deals, both mean the seller has accepted an offer but what is the difference?

A contingent deal is still active considering it has not completed all of its contingencies yet such as inspections, financing, appraisals, home sales, etc. After these contingencies are fulfilled, the property will switch to pending and the sale is simply being processed and there is less likeliness that the deal may fall through.