By Ben Thornburg
•
February 24, 2025
Condos and townhouses typically come with an array of benefits that include amenities, proximity to retail areas, and lower maintenance, but there can also be downsides to this type of property. Lenders look at condos and townhomes in a different light, and they often apply stricter standards than those of a conventional home loan. To understand the process of purchasing a condo or townhome, let’s break down the classification of properties. Mortgage lenders classify homes by type, which includes, detached, semi-attached and attached homes. Detached homes are those where the residents share no walls with another dwelling. Semi-detached are those sharing a single wall, whereas attached homes share more than one wall. More shared wall space translates to increased risk as shared constructions are subject to damage from neighboring residents. The enhanced risk often results in a different type of loan approval process and/or higher loan rates. I would be happy to set up a time with you to review the mortgage process together. In addition to type, properties are classified according to ownership of space. A condominium owner has no title to their land, whereas a townhome owner typically owns the ground directly beneath the structure. This is known as a “zero lot line,” a piece of residential real estate in which the structure comes up to, or very near to, the edge of the property line. Though townhouse owners typically look to maximize square footage, some may include small yards or outdoor patios. As a buyer of a condominium unit, you own all the interior walls and balconies, patios, or decks, but none of the exterior building. Condo owners often buy a stake in the community’s facilities and common areas. The Homeowners Association (HOA) board is charged with overseeing the upkeep of these common areas at a fee. In contrast, townhome owners buy the entire unit, including exterior walls and the land on which the unit sits. If you are looking to purchase such properties, it is important to inquire about fees and any applicable restrictions. Some of these fees and limitations relate to HOA dues, assessment fees for community projects, rental caps, and pet policies. If you are ready to purchase a townhome, condo, or single-family home in Winston Salem or the surrounding areas, allow The Sharpe Mortgage Team to be of service. We look forward to working with you to find the perfect home that fits your needs. Call us today to set up an appointment!