In recent years, the Toronto skyline has been reaching impressive new heights as the city’s population continues to surge. Reportedly with more cranes than New York City at times, it seems the most popular way to house the continuing flood of newcomers to the city of Toronto, is through condominiums.
The one factor most people overlook when it comes to condo ownership, is how monthly condo fees, aka strata fees, affect them in terms of qualifying for and maintaining a good standing mortgage, as well as their long term satisfaction.
Simply put, condos fees are an additional monthly payment formulated off of the square footage of the unit you’re purchasing. Current condo fees average at 75 cents per square foot and are collected by your condo board, not your mortgage lender. Any amenities, projected upcoming maintenance and services provided, like the onsite concierge or winter snow removal, are also factors in the sum of the fee.
The condo fee is taken into consideration when you are qualifying for your mortgage. It’s a non-negotiable payment due along with your mortgage payment. When purchasing a condo you own only that allotted space in the building. The condo building is governed by a board of trustees assembled of elected residents of the building who make decisions on behalf of all residents in the building. Of course your participation is welcome but you won’t always have the final say on adding amenities, desired upgrades to your unit, or the delegation of funds when the building needs maintenance.
Rising fees can also wreak havoc on your bottom line. New condo builds can look very attractive with lower condo fees but typically developers, and /or the board of trustees, can vote to add new amenities over time which will raise your monthly payment. Naturally, economic inflation will also play a part in the steady incline of your fees over the years. This is something to keep in mind if you are already going into condo ownership at the top of your budget.
Don’t think your fees are fair? Unfortunately, the ramifications for withholding your fees back are just as serious as missing a mortgage payment and can result in legal actions taken against you.
With all that said, making sure it’s a well thought out decision and is compatible to your desired lifestyle is essential and why we at Noble Mortgages want to keep you informed to make the best decision possible.
Find out why we are Toronto’s most trusted Mortgage Brokerage 416-271-2227
“Noble Mortgages – We’re bring your home”
May 05, 2016 by Noble Mortgages