Buying a Condo at 23?

[Meyerland]

Originally Posted by vwgto

If you plan to stay-put for at least five years. Buying makes you much less mobile, and transaction fees can add-up.

This is very true. Good luck!

[pooker]

Thanks for the input! I haven't met too many younger people who make this kind of commitment, so I was a little reluctant. I liked the idea of a town house. I actually have a few in mind. It just seemed off-putting to me to spend 1300+ a month in rent for something I didn't own.

[Meyerland]

We were 26 when we bought our first home. Starting early helped us progress on the property ladder. Friends of ours who just bought a home (40ish) regret waiting so long. That being said, make sure you qualify for a good mortgage rate. Also, buy cheaper vs. more expensive. You still need to have a life and be young. You will need to budget for taxes, unless you roll it into your mortgage payment.

[Weatherguy]

For the benefit of everyone looking at this thread, will someone with the knowledge please explain the difference between a condo and townhome, and why a townhome would be better.

[Mr. Krinkle]

Townhome, you own the land and usually have your own garage. Sometime you have a shared wall and sometimes you don't. You may have a small area in the back for a yard.

A condo is more like an apartment.

In Pooker's case, I don't think a townhome would be affordable. A townhome in the Galleria area would easily be double the cost if not more.

[Meyerland]

He is probably looking near Augusta. That is in his budget and considered the Galleria "area". There are some really affordable ones right around there.

[cheryjohns]

The difference in a townhome and condo is the financial set up. With a townhome, you own the ground underneath you, the roof above, the foundation, etc. You may have a garage - it may be parking spaces behind your unit. You usually have a patio.

With a condo, you own "airspace" in your walls and a percentage of all of the grounds of the community. The more square feet you have, the bigger the percentage (a small one bedroom's percentage would be smaller than a three bedroom's).

The maintenance fees are usually a lot higher in a condo because of the reserves held for the common areas, which include, for example, the roof. A townhome set up is usually more similar to a house on the roof, etc. - but not always. In a case where the townhome management is responsible for the roof, then the monthly fees are higher than if they are not.

You can't always tell, just by looking. Georgetown looks like a townhome community (except for some buildings) but it is a condo - and monthly fee can run up to $450.

Whenever there is a slide in appreciation downwards - the condo is the canary in the mine - it depreciates faster and the deepest. In an uptick, it's the last to appreciate. Townhomes next, and then houses.

[pooker]

Originally Posted by Meyerland

He is probably looking near Augusta. That is in his budget and considered the Galleria "area". There are some really affordable ones right around there.

I honestly just want to save as much money as I can. My income this year will be around 110k, but I want to get something as cheap as I can. I have some money saved up to put as a down payment. I have no bills, kids, or other commitments at this point in time. I really enjoy the Galleria area as well and its close to where I work as well.

[cheryjohns]

Go for a conventional of 5% down, with a 80/15 - over an FHA with 3.5% down. PMI (mortgage insurance, which you pay for, but the beneficiary is your lender) is eliminated. FHA used to charge PMI for the first few years, until you had 20% equity. Now it is the life of the loan. That 15% loan is to have you not pay PMI, rather than get a 95% loan.

Get a two bedroom - they are easier to sell than a one bedroom - and you will wind up staying longer in it.