Homeownership Guidance, Advice and Blogs

As the Director of Affiliate Relations at HomeFree-USA, I’ve always been fascinated with how people handle their money. Like everyone else, I’ve had my financial ups and downs. In fact, it took me 32 months to pay off $32,000 in credit card bills and build up a six-month emergency fund. While that was a very difficult period, I am grateful – and wiser -- for the experience.

Through my personal experiences and working at HomeFree-USA, I’ve gained a ton of insight that I feel compelled to share. You’ll find those lessons here. Feel free to take the thoughts and ideas that resonate with you most and put aside the rest for later. I look forward to sharing my journey.

HOA Fees: The Housing Bill You Must not Overlook

Whether you’re a homeowner setting your budget or a homebuyer figuring out how much you can afford, make sure you understand what a homeowner’s association (HOA) does – and whether you have to pay them.

Whether you’re a homeowner setting your budget or a homebuyer figuring out how much you can afford, there’s one housing-related bill outside of your mortgage that you must prepare for.

A homeowner’s association (HOA) is an organization that oversees the maintenance of shared space in your community and comes up with rules to protect the value of your property and the properties of your neighbors. HOA fees are bills paid by homeowners to the association.

Here’s what you need to know about them.

HOAs come with a cost. If you belong to a HOA, you’ll be responsible for paying HOA fees. Depending on the association’s guidelines, you may be asked to make payments monthly, quarterly or yearly. You may be able to choose whichever option works best for you, though if given this option, make sure you understand that if you pay once a year you would be responsible for a larger amount of money at once than if you paid on a monthly basis.

Fees benefit the community. Before you complain about having another bill to pay, understand that your HOA fees benefit you in the long run. Typically the money goes toward expenses that benefit the entire community, such as snow removal, lawn care, maintenance of common areas and in some cases amenities such as community swimming pools or gyms. To find out what your HOA fees are going toward, check your HOA’s rules and regulations, frequently known as the Covenants, Conditions and Restrictions.

You could be penalized if you don’t pay. One of the most important things to know about HOA fees is that you could pay a steep price if you don’t pay them. Initial penalties could be a late fee or additional interest tacked onto the balance until you pay it off. If you continue to be delinquent on your HOA fees, you could lose community privileges, such as the ability to work out in the community gym. Other possible consequences include having the bill sent to collections – which could damage your credit – or being sued by your HOA. In some extreme cases, you may even be able to have your house foreclosed upon if you don’t pay your HOA fees.

Keeping the lines of communication open can pay off. Your HOA is more likely to work with you if you have a problem paying your fees when you are open with them. If you have money troubles, contact your HOA immediately and let them know your circumstances. They may be able to offer a solution such as delaying payments until you can get back on your feet.

HOA fees are just one of the costs of homeownership. Let HomeFree-USA guide you through the others on your wealth-building journey.