Home Owners Association - A Home Owners Association is a group of people who live in a common or given area. Most Condominium complexes and Planned Urban Developments will have associations which are formed to help maintain and improve the quality of the common area.

Usually, these Home Owner Associations (HOA) require you to make a monthly payment. These fees can be included into your loan payment per month and taken care of by your lender. This works the same way as your property taxes.

Make sure that you get to read the HOA's rules and regulations before you buy the house. Many HOA's have strict rules on what can be done and what can not be done to the house.

Some HOA are so strict that they have someone driving around to ensure that everything in the community is in compliance. Some communities have members of the assocation (people who live there) actually report people also. After all, this is for the benefit of the community you buy into. Definitely understand the HOA policies before purchasing a home that has HOA. If you don't agree with it and don't want to comply with it they may want to look into other communities without HOA.

An HOA is a useful tool to preserve the property values of a neighborhood. Their tight covenants and restrictions prevent junk cars and unkempt lawns from ruining the appreciation rates of the neighbors. Be sure to carefully read the Homeowners Association agreement prior to committing your self to a property or signing a contract.

Part of you association fees will go toward providing hazard insuranced on all of the homes in the community. This insurance will typically only cover the structure itself, and not your personal property. For this reason you should look into taking out renters insurance to replace your belongings in the event of a fire, theft, etc.

You can expect a steady rise in the cost of your HOA dues every year.

Many people in retirement prefer to live in developments with a Home Owner Association such as condominiums because condos provide the convenience of property management. Residents in these condo developments never have to remove snow in the winters and mow the lawns in the summers.

Homeowners Association Fee - When you move into a neighborhood that has a HOA (Homeowners Association) keep in mind that you will also have Homowners Association Fees to pay. These fees are generally charged monthly or annually. There are a wide variety of items that your fees may cover from lawn maintenance to snow removal to upkeep of the neighborhood. Check with your homeowners association if you would like to see where your money is going and what it is being used for exactly. Many HOAs provide a yearly budget and/or breakdown of the money it brings in and how it is dispersed.

Failure to pay your HOA dues can result in your property being foreclosed.

Homeowners Associations have boards of directors in which homeowners serve as elected directors. Normally, any homeowner in good standing can run and try to be elected to a director position. This allows the homeowners to have input on the CC&Rs and the manner in which the association is operated. The board of directors is usually the entity that determines the amount of the fees and other budget considerations.

The HOA fees will also be used to claculate your debt to income ratio (DTI). Make sure if you are refinancing or buying a new home that has a home owners assocciation you tell your mortgage professional how much the dues are and how often they are due.

When shopping for a home, keep in mind that HOA dues can vary widely from one association to the next, even if the communities look similar. Some may have HOA dues so high that they make a noticeable impact on the property value or the size of loan you can qualify for.

Your HOA will have meetings that will update you on current events that are associated with the HOA, what to expect for changes such as additions such as a pool or tennis courts and most of these things you as a member will be voting on.

Having these fee's benefit you as the homeowner as well by keeping your community looking nice and well kept, which only helps with the value of your home. It is always a good idea to get a copy of the regulations of the association to be sure you can conform to the requirements of that community.

Keep in mind that HOA dues are not optional, and need to be in your budget.

When you live in a community with a homeowners association, keep in mind that most homeowners associations have their own rules, by-laws and restrictions. They may have rules that state no sheds, no RV's or boats to be stored on property, only certain types of fences allowed, grass cannot exceed a certain height, home improvements may need to be approved by the HOA (homeowners association) board before you can start them, etc... So familiarize yourself with your communities by-laws and such or ask to see a copy of the HOA by-laws and rules before placing a bid on a home in an area with a HOA.