- Keep total housing payments — mortgage, condo fees, taxes and insurance — under 30% of your gross monthly income to determine how much you can afford.
- Condo down payments can range from 3% to 20% depending on your loan program; a larger down payment lowers monthly costs but may delay your purchase.
- Condo association fees and CC&Rs (covenants, conditions and restrictions) affect both your budget and lifestyle — review them before making an offer.
- A home inspection is essential before closing; hire an inspector who follows Home Inspection Standards of Practice or is a Certified Master Inspector.
Tips for Buying Your First Condo
If you’re wondering how to buy a condo for the first time, start with the basics: Know what you can afford, understand how much down payment for a condo you may need and learn what questions to ask before you commit. Here are six helpful steps to help you plan your budget, compare your options and move forward with more confidence.
Key Takeaways
Quick takeaway: As a first-time condo buyer, it helps to look beyond the mortgage payment. Condo fees, taxes, insurance and maintenance can all affect how much you can afford.
Step 1: Prepare your finances
The first step on your condo-buying journey is to calculate how much you can realistically afford to spend.
When budgeting for a condo, it’s usually more helpful to look at the full monthly housing cost — including mortgage, condo fees, taxes and insurance — instead of focusing only on the purchase price.
Keep your total housing payments — mortgage, condo association fees, property taxes and insurance —under 30% of your gross monthly income.
Now is also a good time to gather the documents you’ll need for your mortgage application, like your bank statements, pay stubs and copies of your tax returns.
As you estimate your budget, remember to plan for both up-front and ongoing ownership costs.
| Cost to plan for | Why it matters |
|---|---|
| Down payment | Impacts how much you borrow and what your monthly payment may look like. |
| Condo association fees | These recurring costs can meaningfully affect how much of a condo you can afford. |
| Property taxes and insurance | They’re part of your total housing cost and should be included in your budget early. |
| Inspection and closing costs | These upfront expenses can add to the amount you need to save before buying. |
Step 2: Put money aside for a down payment
Once you’ve figured out how much you can afford to spend on a condo, the next step is determining your target down payment and starting a savings plan.
If you’re wondering how much down payment for a condo you’ll need, the answer depends on your loan type, lender requirements and financial goals.
Many buyers aim to put 20% down, but some loan programs allow qualified buyers to put down less. For example, you may be able to put as little as 3.5% down with an FHA loan or 3% down with certain conventional first-time buyer programs.
A larger down payment may lower your monthly payment and reduce how much you need to borrow, but a smaller down payment may help you buy sooner.
Step 3: Research your credit report and score
Your credit will be a vital factor in getting approved for a loan. So you should check your credit score for accuracy and look for ways to raise it, if necessary. To strengthen your credit profile for lenders, avoid any new credit activity – like opening a new credit card – and pay down your existing balances until you’ve purchased your condo.
Step 4: Decide on a must-have list
Write down all the features you want in a condo and break it down into a short list of “must-haves” and a longer list of “like-to-haves.” If a condo doesn’t have all of your “must-haves,” move on to the next option.
This can also make it easier to compare units when you’re learning how to buy a condo first-time buyer style — with a clear plan instead of relying on emotion alone.
Step 5: Learn the basics about condo associations
Condo associations are great for maintaining the cleanliness and aesthetic of a building, but they come with regulations and monthly fees. Association fees can vary depending on your property and can include coverage for costs such as the master insurance policy premium, utilities for common areas, maintaining common areas, and keeping the association’s reserves well funded in case of emergency. Before making an offer, remember to ask questions about the condo association you’ll need to join. Get a copy of a condo association’s covenants, conditions and restrictions (CC&Rs) from your real estate agent, and review them to make sure you can live with the condo association’s rules before you put in an offer.
Questions to ask before you buy:
- What do monthly condo fees cover?
- How much does the association have in reserve funds?
- Have there been any special assessments in the past five years?
- What are the rules on pets, renting or noise?
It may also help to understand what the association’s master policy covers and where your own condo insurance may begin. If you want to learn more, see how condo insurance differs from home insurance and understanding HOA insurance.
Step 6: Find a good home inspector
Before you close on a condo, you’ll need to hire a home inspector to examine the property and report on its condition. However, not all inspectors test for the same things, which can include pests, mold or toxins. To ensure you’re getting a thorough inspection, Nick Gromicko, executive director at the Master Inspector Certification Board, recommends hiring someone who complies with the Home Inspection Standards of Practice or who is a Certified Master Inspector.
Purchasing your first condo takes planning and patience, so don’t rush the process. Taking time to compare options, review association rules and understand the full cost of ownership can help you find a condo that fits both your lifestyle and your budget.
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FAQs about buying a condo for the first time
Start by setting a realistic budget, checking your credit, saving for a down payment, identifying your must-haves and reviewing condo association rules before making an offer.
It depends on the loan program and lender. Some buyers may qualify with less than 20% down, while others may choose to put more down to lower monthly costs.
A good starting point is to keep your total housing costs — including mortgage, condo fees, taxes and insurance — within a comfortable share of your monthly income.
Yes. Monthly condo association fees can significantly affect how much home fits your budget, so they should be included when comparing properties.
In many cases, yes. Your lender may require it, and it can help protect your unit, belongings and personal liability based on your policy. Learn more about condo coverages.
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