Are HOA Dues Making Real Estate Unaffordable? Read this very instructive analysis.
Let’s imagine that a lender allows 31 percent of your income for housing-related costs, and that two buyers have a combined income of $6,000 per month.
This means up to $1,860 can be spent on the mortgage, insurance, property taxes and HOA or condo fees. If insurance costs $100 per month and taxes are $300 per month, then the borrower has $1,460 available for mortgage payments.
Based on income, you’d probably qualify for a 4.25 percent, 30-year, fixed rate mortgage for roughly $296,750.
Add $270 in HOA dues, and just $1,190 is available for mortgage payments — the loan amount falls to 241,900– $54,850 less, enough to make many properties unaffordable and off-limits.
There’s an impact of HOA dues on size of mortgage you can qualify for. Obviously you get less when HOA dues enter the picture. So, why are the pro-HOA proponents still talking about HOAs as affordable housing? Why?
Where’s the full disclosure? Isn’t this false advertising and misrepresentation?