Once you’ve decided that the time is right for you to purchase a home, you’ll likely start thinking about whether you want to choose a freehold property, or a condominium. Varying drastically, whichever one you choose will have a significant impact on both the cost of a home and how you can use it.
Let’s take a closer look at the two forms of property ownership, to help you decide which might be the best choice for you:
Used to describe the majority of detached or semi-detached homes, a freehold is a type of property ownership where you don’t just own the building, but the land that the building is on, too. Subject to provincial and municipal zoning laws, as a freehold owner you’re able to add or remove structures and make changes to the property, as you wish.
Freehold homes naturally offer a higher level of flexibility and privacy, but can be more expensive both to purchase, and maintain.
Apartments, townhouses and units in property complexes are generally referred to as condominiums, and when you purchase one, you’ll own your unit but common areas, such as exterior walls, windows, gardens, driveways, hallways, elevators, lobbies and social areas, are owned jointly by each resident. Common areas are maintained by a condominium corporation, for which residents are charged a monthly fee that forms part of your occupancy costs. Condo corporations are also permitted to limit and regulate any changes you may want to make to your own unit.
When searching for a condo unit to buy, it’s important to keep in mind that the fees charged by the condo corporation can vary significantly depending on a number of factors, such as the type of unit you buy, the building it’s in and the range of amenities you can access as a resident. If a condominium complex has a private garden, pool or gym, for example, this can bump up the monthly fee you’ll be charged. Whether that fee is worth paying on top of your mortgage and other outgoings, will be up to you to decide, and you can always seek professional guidance from a financial advisor or mortgage broker to help you make a more informed and rational decision.
Financing your freehold or condominium
Whichever type of home you choose to buy, working with an experienced and local mortgage broker can help you navigate the financing process, and a get a great deal on a mortgage to purchase your home with. With their unique relationships with a variety of different lenders (not just the big banks, but private lenders) and knowledge of the local housing market, they will help connect you with a lender that can give you the best mortgage solution you’re your circumstances.
Freehold or condominium; whichever you choose, make sure that you take the time to evaluate your choice thoroughly and to seek sound advice from someone who will remain impartial, such as a local mortgage broker.