For a lot of urban dwellers, buying a property in a common interest development (CID) is an affordable option. Not only are the prices typically a lot cheaper than your average freehold home, the location and amenities of such properties are usually a lot more desirable.

But when it comes to CIDs, there are a few options, including condominiums, strata, homeowners association (HOA) and co-op associations. Many people might use these terms interchangeably, but they actually each have their own unique characteristics.

Here’s a run-down of each, and a brief explanation of how they differ.

Condominium

A condo is a unique type of property ownership that lets the homeowner fully own an individual unit in a multi-unit complex. These owned spaces are considered to be everything inwards of the walls of the unit. Homeowners in these complexes also have undivided interest in common areas – like the lobby, elevators, hallways, and building amenities – as well as exclusive or semi-exclusive use of specific common property, including balconies, patios, parking spaces, and lockers.

These common areas are owned and managed by a condo corporation that’s made up of the owners of the units. Condos charge a fee that covers expenses such as landscaping, repairs, building and property maintenance, and charges for amenities.

Strata

Unless you live in Australia or British Columbia, Canada, there’s basically no difference between “condo” and “strata,” where the latter term also includes townhouses.

The term “strata” was initially used to describe apartment blocks that had two or more levels. But strata pretty much has the same concept as a condo, which deals with individually-owned units with shared common areas.

Homeowners Association (HOA)

HOA’s oversee any changes or developments that could and should be carried out in a shared property. It’s a non-profit organization that’s put in place to improve the overall community, and has different responsibilities and purposes than the condominium association. An HOA isn’t limited to apartments; it can be put in place in just about any residential community with homes. Unlike a condominium, HOA bylaws aren’t recorded in land records.

An HOA is a group of homeowners who live in a development or community, and are involved in the maintenance and repair of certain facilities, as well as the enforcement of the covenants and restrictions that have been previously accepted by the community.

Common areas of the development are owned by the HOA, which the lot owners do not have ownership interest in. While owners are free to use these common areas, they must do so according to the covenants and restrictions. If an owner violates these regulations, these rights can be suspended.

Like condo associations, HOAs charge owners a set of monthly fees to help cover the expense of maintaining the property and carrying out any necessary repairs. However, these fees are typically a lot less compared to those of a condo association because of the reduced maintenance, repair, and insurance obligations of the HOA.

Co-Op Associations

A co-op association owns a certain property and its common areas and facilities. Residents own a share in the co-op association in order to be allowed to occupy a unit. They are free to use all common amenities, and can even vote in members to be a part of the Board of Directors.

The major difference between cooperative housing associations and condos is the fact that residents do not actually own the units – instead, they merely have a share in the co-op.

Basically, residents in a co-op association buy shares in a not-for-profit corporation, and have the right to lease their units within the complex. The monthly fees that are charged not only cover maintenance and repair costs, but also mortgage payments, taxes, and management fees, which is why they’d typically be a lot higher compared to those of a condo.

Shares in a co-op association are considered intangible personal property, which means residents most likely wouldn’t be able to get a line of credit or home equity loan against ownership because nothing is actually owned. Any shares in a co-op would be passed on to an executor after the resident passes on, which are then subject to certain regulations.

Don’t just assume that every complex that involves the sharing of common areas is necessarily a “condo.” Make sure you understand that these separate options are available to you, and that each come with their own sets of traits. Do your homework to find out what these differences are so you can be sure to pick the one that’s right for you. Luckily, your real estate agent will be able to cut trough the confusion and lead you in the right direction when it comes to home ownership.

In a strong seller’s market, homes that are priced right and show nicely typically sell within the first four weeks of being on the market. If this time frame comes and goes with no successful offer, sellers will most likely become frustrated, and even start contemplating the possibility of just taking the property off the market for a little while and try again some time in the near future.

The truth is, you can realistically sell your home in any market, if you get yourself a solid real estate agent and use a few proven tactics to garner more serious interest in your home.

So, should you take your home off the market if it’s not selling?

Before you make such a major decision, have a look at a few reasons why your home isn’t selling first.

The Listing Price is Way Off

Lots of homeowners hold emotional ties to their properties and genuinely think that their homes are worth more than they really are. And of course, everyone wants to get as much money from the sale of their home as possible, and demand that their agents slap a hefty price tag on the listing.

Unfortunately, nothing will cause a lagging listing more than a listing price that’s too high for the current market. If your home’s been sitting on the market for weeks – or longer – without a nibble, the first thing you should do is look at the listing price and determine whether or not it’s too high.

If so, it’s time to shave a few bucks off.

Your real estate agent will be able to pull a report of the recent comparable sales in the neighborhood. Be sure that you ask no more than 5 to 10 percent over the previous top selling price. And don’t have the most expensive listing on the block, either – buyers are looking at the same comparables, so you don’t want to scare them off before they’ve even seen your property.

Price point is critical – if you don’t price your home properly, you’re pretty much asking for a stale listing.

Your Home Doesn’t Show Well

Aside from setting an accurate price point, making sure that your home is properly staged is absolutely essential. Nobody wants to pull up to a home with overgrown weeds and pet excrement in the front yard. Nor do they want to walk inside and see yesterday’s laundry piled up on the couch, or a stack of dirty dishes piled up in the sink.

Granted, these scenarios are pretty outrageous (though they do happen), but even simple things like a cracking door, broken window blind, or orange walls will throw buyers off.

Take a second gander at your home and make sure that you’ve tackled everything as far as staging is concerned. Is the lawn well manicured? Is the house clean and tidy? Are the colors neutralized?

Don’t leave your home in the morning without making sure that all beds are made, dishes are washed and put away, and counters are clear. You just never know when a last-minute showing is booked, giving you no time to run back from the office to clear the place up before the buyer show up.

When in doubt, have your home staged by a professional home stager.

The Place is Outdated

Houses that feature outdated kitchens and bathrooms will usually sit on the market longer than more modern properties, or even wind up selling at a lower price.

It’s possible that your home may need some upgrades, but you’ll also need to be realistic with both your time and your budget. Make sure that whatever money you’re spending is a wise investment.

The rule of thumb is to avoid huge projects that will be super expensive. Perform as many small home improvements as you realistically can, and look for improvements that will most likely make your home move-in ready as far as potential homebuyers are concerned.

Typically, the most valuable home improvements include painting, replacing or refacing a worn-out front door, touching up faded siding, refacing kitchen cabinets and countertops, and replacing hardware in the kitchen and bathroom. You probably won’t recoup as much of the cost if you add a bathroom, sunroom, or gutted the kitchen.

Don’t Put a Cap on Your Options

If you’ve absolutely tried everything, and your home still isn’t selling, consider hedging your bets and putting your home up for sale and for rent at the same time.

If you’ve already vacated the property, or need to relocate soon, maybe renting out your home could be a realistic approach. That is, of course, if your finances support such an option.

Putting the house up for rent and for sale at the same time can give the potential clientele a trial rental period. Perhaps your particular market is experiencing a temporary slowdown, but the rental market is really strong. If you’re able to carry two mortgages, you could allow your home to act as an investment property while buying time until next year when the market has (hopefully) picked up for sellers.

In the meantime, let the renters pay your mortgage for you while your home continues to build equity. If you find a renter and get a lease signed, your lender will be much more likely to approve you for second mortgage to keep the home while you start your life elsewhere.

Make sure you exhaust all efforts to make your home as attractive as possible – both esthetically and price wise – and get yourself a skilled real estate agent on your team. Sometimes all it takes is a temporary time-out from the market to make a few tweaks to the place and the listing, then put it back up on the market in a few weeks to get a fresh start.

College kids aren’t just coming out of school with a degree; they’re also leaving with a heap of student debt.

But while college grads may be strapped with a few years of student loan repayments ahead of them, that doesn’t necessarily mean that the debt should be an obstacle to getting approved for a mortgage.

Of course, there are a few other factors that will play a part in whether or not a stamp of approval will be granted, such as employment history and credit score.

What Do Lenders Really Care About?

Three metrics typically come into play wen lenders are deciding whether or not to approve or deny a loan application:

▪          Credit score

▪          Income compared to expenses

▪          Employment history

Let’s have a look at each in more detail.

Credit Score

Even if you have a ton of student debt that you still need to pay off, that doesn’t mean that your credit score necessarily has to suffer. As long as you are making your monthly payments in full and on time every month, your credit score should be healthy (as long as you’re doing everything else right).

Lenders will usually feel more comfortable loaning out a big chunk of change if your credit score is 750 or higher. To have a score like this, it means you’ve been making all of your payments promptly and have a solid history of using your credit. The last thing you want your potential lender to see on your credit report is a string of late payments, collections, or even bankruptcy.

This goes for your student loans too. If you want to boost your chances of getting a mortgage, make sure you’re always paying your student loan on time.

However, forbearance will have a negative effect on your credit score. Forbearance (or ‘deferment’) allows you to put a temporary halt on making your federal student loan payments, or temporarily decrease the amount of money you pay. If your student loan is in forbearance, it’ll reported to credit bureaus as a non-paying debt, which will do nothing but cause your credit score to plummet.

This doesn’t mean that lenders don’t mess up from time to time. In fact, according to the Federal Trade Commission (FTC), about one in four consumers find errors on their credit reports that could negatively affect their credit scores. That’s why you should always pull your credit report before applying for a loan to see if there are any mistakes that should be rectified. If you find anything incorrect on this report, the credit bureaus are obligated to investigate.

Income and Expenses

One thing that lenders take a good hard look at when scoping out potential borrowers is all the expenses in relation to overall income. They want to make sure that you can easily and comfortably afford to continue to pay off your current expenses, in addition to taking on additional debt.

To figure this out, lenders will usually look at a couple of equations:

Debt-to-income ratio – Basically, this fancy number represents nothing more than your monthly gross income that is dedicated to paying off current debts (along with taxes, fees, and insurance). More simply put, it’s the amount of debt you’ve got compared to your overall income, and is expressed as a percentage. Lenders usually like to see borrowers with a debt-to-income ratio of no more than 36 percent – the lower, the better.

Payment-to-income ratio – Also expressed as a percentage, your mortgage should ideally not exceed more than 28 percent of your total income. Any higher than this number could flag the lender to hesitate further burdening you with added debt.

Your student loan debt could have an affect on how your lender believes you’ll be able to pay a mortgage. If your total debt payment (your student loan, mortgage, and other miscellaneous debts) are calculated to be more than 36 percent of your income, you can probably assume that a mortgage won’t be approved. But if you can keep it under this number, you have a shot at approval.

Employment History

An important factor that lenders will look at before approving you for a mortgage is your employment history. They want to know that there is a stable source of income that’s readily available to pay the mortgage off every month. While some lenders are pretty stingy and want to see at least two to five years of work experience in the same industry, other lenders are satisfied with at least one year to help determine your regular income.

This is a toughie for recent college grads who haven’t had enough time to accumulate this much work experience. That’s why graduates might want to consider renting for a few years first. This will provide the opportunity to continue to build good credit by paying the rent on time and every month. Lenders like to see history like this before approving anyone for a mortgage.

However, if you’ve been working for a few months after graduating, and have maintained a steady job throughout school, this may count for something if you’re considering applying for a mortgage right out of the gates.

Student loans on their own won’t prevent you from getting approved for a mortgage, despite what many might believe. Other factors also come into play, including your credit history, your income, and your total debt amount. If these numbers are pretty healthy, and you’ve been pretty responsible with managing all your debt, there shouldn’t be anything standing in the way of getting a mortgage.

As of October 1st, home buyers will be armed with more information about their mortgages, and will be given more time to review their mortgage rate and fee quote documents.

Right now, the law requires borrowers to fill out two disclosure forms when applying for a home loan. In addition, two forms also need to be completed on or just before closing. These forms were intended to protect borrowers from fee abuses, and have been around for a while.

The Truth In Lending Act (also known as TILA) is designed to protects borrowers from being blindsided by unknown closing costs by regulating how mortgage fees and conditions are calculated and communicated.

The Real Estate Settlement Procedures Act (also known as RESPA) protects borrowers from being victimized by unnecessary real estate transaction expenses by preventing various housing services from paying each other money in exchange for customer referrals.

Currently, borrowers are required to receive a Good Faith Estimate and an Initial Truth In Lending disclosure within three days of applying for a mortgage. This disclosure document outlines the quoted interest rate on the mortgage, terms, and total fees over the course of the loan.

Lenders also have to provide borrowers with a HUD-1 before closing. This form stipulates in detail all the fees associated with the real estate transaction, including exactly how much money will be needed to close on the transactions, and the final Truth In Lending disclosure.

Simplifying the Process With the New TRID Rules

While this information is very helpful for consumers, it can be rather complex to figure out. Not only that, but consumers may be too late to make any adjustments after comparing the initial Good Faith Estimate and an Initial Truth In Lending disclosure to the final HUD-1.

The Consumer Financial Protection Bureau (CFPB) has taken over these regulations, and combined them to form the TILA-RESPA Integrated Disclosure Rule (TRID) which will take effect October 1st this year. The process is made simpler under the new TRID rules with the merging of the Truth-in-Lending form and the HUD-1 form to create The Closing Disclosure, a unified 5-page document. Only the buyer will receive the Closing Disclosure.

These new disclosures are aimed to provide borrowers with much more detailed information about their mortgage packages, and will give borrowers a lot more time to review them. Consumers are to receive a Loan Estimate Form within three days of applying for a mortgage. This form outlines the breakdown of fees, interest rate, amount of money necessary to close, conditions, and costs over the life of the loan.

Consumers will then receive a Closing Disclosure Form a minimum of three days prior to closing. This form is very similar to the Loan Estimate document, but also differentiates the expenses paid by the buyer, seller, and other parties involved in the transaction. This gives borrowers more time to go over the final terms of the mortgage. But because of such an extension of time to go over these documents, the closing process will also take longer to complete.

Fee Disclosure

Borrowers will have the advantage of greater transparency in accurate disclosure of all fees associated with their home loan. After the borrower applies for the loan, lenders will have to disclose these numbers.

Since the fees will be alphabetized and categorized, it should be easier for borrowers to compare estimates between mortgage lenders. Loan Estimates (LE) expire after 10 days, but buyers are not obligated to continue the transaction. However, once the borrower decides to proceed, the fees are then locked in.

If you’re planning on applying for a mortgage in the near future, be sure to speak to your mortgage specialist to find out exactly how these new rules will affect your home loan process. While home buyers should anticipate a 3-day delay in closing, the new TRID rules should improve the overall mortgage and closing process.