PITI ... Don’t forget HOA dues

You are probably familiar with PITI by now, but do you know about HOA dues?

First, here’s a quick refresher on PITI:

P = Principal (the amount you will pay down on the loan balance)
I = Interest (the amount you will pay the bank for the loan)
T = Taxes (the amount you will pay the county for property taxes…frequently escrowed)
I = Insurance (the amount you will pay for homeowners insurance…frequently escrowed)

PITI is paid monthly to your lender. This is the statement you get every month that shows the principal and interest and if your taxes and insurance are being escrowed, that amount is on there as well. (The escrow account will pay the property taxes twice a year and the insurance one time per year so you don’t have to worry about that. If property taxes or homeowners insurance premiums fluctuate, then your monthly bill will adjust as well.)

Buyers searching homes for sale in Illinois frequently overlook an ongoing cost that can drastically impact their budgets. The cost of a property’s Homeowners Association Dues. A Homeowners Association (HOA) makes and enforces rules for the properties in its jurisdiction. HOA’s also collect monthly, quarterly, semi-annual or annual dues to pay for upkeep of common areas like parks, tennis courts, and swimming pools. HOA’s can levy special assessments on the owners if the association doesn’t have enough funds to pay for unexpected repairs.

HOA dues can get costly depending on the specific HOA. Certain subdivisions have master associations where you have to pay dues to the master association and the homeowners associations. Certain associations have special assessments in effect that must be paid for a specified amount of time. These are all costs that you must be aware of prior to purchasing a home. Some buyers find that once the HOA dues are added to the monthly cost, the purchase of a certain property becomes too much to bear.

Typically, a condominium has higher dues than many single family homes due to all the inclusions in the HOA fees. Condos can have dues that are a couple hundred dollars per month and single family homes that have a lot of community amenities tend to have higher HOA dues as well. Be sure to consult with your Bowers Realty Group realtor to find out what is included in the HOA dues for the property you are interested in.

Please note, not all properties belong to an HOA nor have the dues. Consult with your Bowers Realty Group realtor to find out if the property you are interested is part of an HOA.