HOA- Home Owners Association
The HOA is a group that is put together to collect funds from a homeowner to maintain the appearance of the mutual owned property, property insurance (if it is a condo), and more.
The HOA fee has to be paid indefinitely even when you pay off the mortgage loan. The property still has to be maintained. When you are looking for a home and there is a HOA fee associated with property, you should review the Bylaws. Some HOA documents do not have a cap on how much they can increase your fee. I did not take a look at this when I purchased my place. After living at my place for 5 years the HOA is almost doubled the original cost and every year there is a special assessment for something.
Beware of HOA’s that include utilities such as water and cable. If you do not pay, the board can cut off your utilities with notice. There are plenty of people that feel as if they do not need to pay the HOA because of the increase rate of the HOA, but you want to pay. The board can place a lien on your property, where you would not be able to sell unless you pay off the HOA owed. Most HOA’s cannot keep the appearance of the property up, if some property owners do not pay.
Most real estate agents will not want to go over this with you. They will skip over it, as if it is a small fee and no one ever has any issues. Do your own research before purchasing your property.