Top 3 Financial Considerations when you Buy a Townhome

townhomeTownhomes are a great way for families to have quality, low-maintenance living in an urban area. A lot of new townhomes are going up in those ideal neighborhoods near public transit and top-tier schools, meaning that residents can have all of the benefits of home ownership and still have easy access to city resources. With that said, buying a townhome is different than buying a traditional new home. Here are a few things to keep in mind as you start looking into townhomes in your area.

You’ll Often Need a Mortgage

Many buyers need to take out a home loan to finance their townhome. However, some lenders have trouble accurately appraising townhomes, and they may underwrite all townhomes like condos, which have more expensive and restrictive financing. Most homeowners report struggling to understand the details of your mortgage, so it may be worth your while to find a lender with experience in townhome mortgaging. Your lender can explain how your home loan may differ from a traditional home loan.

You May Need to Join a Homeowners Association

One of the best parts of townhome living is the ability to own a single-family unit without having to worry about exterior maintenance. Many luxury townhomes will also have amenities such as swimming pools, tennis courts, playgrounds, and clubhouses that are accessible to all homeowners. While residents aren’t required to maintain the common areas, they’ll often have to join a homeowners association, which uses member fees to keep the areas in good order.

You’ll Probably Save Money

Despite the additional costs mentioned above, living in a townhome will often save you money, even if you’re in a desirable location. Luxury townhomes are often less expensive than single-family homes in the same neighborhood. Having a smaller area can equate to fewer housing maintenance costs, and residents of townhomes also tend to spend less on utilities.

Always talk to your real estate agent, mortgage lender, and financial advisor before you invest in a townhome. You’ll want to build an overall budget and talk to your spouse about your financial goals before changing your residence. With the right planning, luxury living can more accessible than you ever imagined.