4 Reasons Condos Make a Great Choice for Your First Home
After years of working, living with your parents and saving up, you might be ready to leave the nest and get your own place.
But while some young adults move from their parents’ home into an apartment, don’t dismiss the idea of getting a mortgage and buying your first place. If you have sufficient income and credit to qualify for your own home, why waste money on rent when you can invest in your future?
The thought of buying a home can be intimidating, especially if you’ve never lived on your own. Also, if you plan to live alone, you may feel there’s no reason to get a house for just one person.
However, your first house doesn’t have to be a massive space. It can be condo, which is the perfect steppingstone to your dream home. So, rather than think an apartment is the only option at this time in your life, here’s why your first place could be a condo.
1. Your Mortgage Might Be Comparable to Rent
Condos are usually smaller than single-family homes and offer comparable square footage to an apartment. The monthly mortgage payment for a condominium might also be comparable to what you’d pay to rent a place of similar size.
Let’s say two bedroom apartments in your area average about $1,300 a month. For this same monthly payment, you could purchase a condo around $200,000 (including taxes and insurances), assuming a 5% down payment and a 4.5% interest rate.
The key difference between renting an apartment and buying a condo is that the monthly mortgage payment you make towards your condo can help you to build equity in that property, ultimately improving your net worth (as long as real estate market conditions remain stable in your area).
2. You Can Leverage Your Equity When You’re Ready to Buy Your Next Home
Given how the condo is your first place, you might decide to move up to a bigger space in a few years. With that being said, leaping into homeownership allows you to build home equity at a younger age.
As you pay down the mortgage principal and your property appreciates (hopefully) in value, you build equity that can be used as down payment on your next home. With a sizable down payment on your next property, you might get more square footage and additional amenities, but only increase your mortgage payment by a small amount.
3. Ease into Homeownership with Less Maintenance
Some people put off homeownership because they don’t want the hassle of maintaining a property. One benefit of buying a condo is that the grounds around your home are typically maintained by a condo association.
The association cuts the grass, trims the bushes and cares for certain aspects of the property, such as your roof, siding, fence and parking lot. There’s one caveat, though.
Moving into a condominium community requires paying a monthly condominium fee. These fees vary, but can cost over a hundred dollars each month.
4. Enjoy Apartment-Like Amenities
You might prefer apartment living because of amenities available within a complex, such as exercise rooms, swimming pools, tennis courts, trails and a community center. However, some condominium communities offer similar amenities within steps of your property. You can enjoy the lifestyle of apartment living, as well as the benefits of ownership.
Now might be as good of a time as ever to invest in yourself. Being a first-time homebuyer can be scary, but Cherry Creek Mortgage is committed to walking you through the process from start to finish. Give us a call to discuss mortgage solutions designed specifically for you. Whether you need a low-down payment mortgage or down payment assistance, we have resources to make your dream a reality.