Mortgage Goals: Townhome, Condo or House?

Posted by Laine Smith on 11/6/14 5:00 PM

Topics: Home Buying

Homebuying is a journey of decision-making. You choose your real estate agent, your desired location, your mortgage lender, your loan program, your insurance agent, etc. When it comes to picking the type of home you purchase (condominium, townhouse or house), there are several factors that should come into play.


But first, what are the main differences between the three?






A housing structure that is part of a bigger unit or building.

An attached single-family dwelling where identical units share walls with one another.

A single-family detached housing structure.


Ownership is limited to the interior of the condo – land and common areas are typically governed and maintained by a Homeowners Association (HOA).

Ownership includes the dwelling, as well as any yard or deck. Common areas and the home’s exterior may still be governed or maintained by an HOA.

Owners of a detached home own the structure and land and are solely responsible for the maintenance of both.


Similar to apartment-style living. Dwelling may be on any floor.

Typically starts on the ground floor; may have multiple stories with access to outside and a small yard.

A free-standing residential building with a single or multiple stories.



Location is often the main determining factor in choosing a home type. “Location, location, location” is real estate’s catchphrase for a reason. Condos and townhomes are typical in a more urban setting, close to employment, entertainment, restaurants, shopping and public transportation. A single-family detached home is more common in the suburbs but can still boast proximity to some of the same amenities urban living possesses.

Lifestyle & Maintenance

What are you trying to achieve with your home purchase? Are you an empty-nester looking to downsize or newlyweds looking for a starter home for a growing family? Condos and townhomes are typically smaller in size than detached single homes and owners benefit from the decreased amount of maintenance but often sacrifice privacy being in such close proximity with neighbors.


As stated above, condo and townhome owners pay fees to a Homeowners Association (HOA) to cover the cost of upkeep of common areas and buildings, such as landscaping, elevators, swimming pools, clubhouses, parking areas, fitness centers, and other structural areas o f shared buildings. Homeowners benefit from the maintenance services but are also subject to covenants, or rules, set by their HOA.

For example, a townhome owner may be restricted by HOA covenants on changing the color of the exterior of his unit or putting up a chain-link fence in his backyard, even though he owns the dwelling and the land. House owners enjoy the ability to customize their home to their own liking.

Price & Cost of Upkeep

Single-family, detached homes typically carry higher price tags than townhouses and condos, depending highly on location, and have higher home maintenance costs, but house owners have all of the say in what get fixed when and how much they are willing to spend.

Townhome and condo owners who pay fees to an HOA are subject to the HOA’s decisions on maintenance. If there are not enough funds in the HOA reserve, owners have to come up with the extra on top of their monthly/yearly dues.

Finding the best property type is about finding what is right for you and your family, because condos, townhomes and detached single-family homes all come with their own set of pros and cons.

Looking for more information regarding the homebuying journey? Our Mortgage 101 Handbook is a great resource for first-time homebuyers.

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