Many people want a home that isn’t governed by an HOA, but that is very unlikely in our area. HOAs, Homeowner’s Associations, are everywhere and it is vital that you know what you can and cannot do when it comes to payments and involvement. Here are a few myths surrounding HOAs along with helpful information if you ever find yourself owning a home that is subject to one.
Myth #1: I can avoid my HOA dues if I want, they can’t do anything to me. FALSE! To keep your home from being foreclosed on, you will want to always pay your mortgage AND your HOA dues. That is because in North Carolina, HOAs can foreclose on your home for missed payments. I have seen a situation where a person thought they could get away with not paying the $30 monthly dues because they were mad at the HOA. But the HOA had the last word. The HOA put a lien on the home and subsequently foreclosed on the house. The owner’s bank bought the house through the foreclosure and then the owner had to pay tens of thousands of dollars to get their own home back, all over $30 HOA dues. Bottom line, never avoid your HOA dues.
Myth #2: HOA dues are included in my mortgage payment. Not so fast. You will only see your principal payment towards the house, interest payment on your loan, and then escrow payments (taxes and homeowner’s insurance) included in your mortgage payments. HOA dues are paid directly to the HOA or their management company, not your lender. Make sure you are aware of the amount of your payment and the frequency to which you have to pay, such as monthly, quarterly, or yearly. The easiest thing to do is to set up autodraft so you never have to worry about missing this payment, as again it’s just as important as your mortgage payment.
Myth #3: I don’t have a say in what happens in my neighborhood! Actually, you do have a say in what happens in your neighborhood and the more involved with the HOA you are the more you can have an impact. You can do as much or as little as you want, ranging from voting at meetings to running for an office on the Board. As a resident, you should be kept informed of decisions coming up for a vote and, if you want to, go to meetings to have your opinion heard and vote for things that may affect you. At the very least, make sure you are receiving newsletters from the HOA, whether they are in paper or digital form. That way you are not blindsided when there may be voting on upgrades to the neighborhood that may cost you extra money. It’s also a good way to keep up with any social activities your HOA may be holding such as a food truck rodeo or holiday party. As the old saying goes, if you can’t beat them join them. Otherwise, just try to fly under the radar and keep watch for things that directly affect you as a homeowner.
With this knowledge, now you can rest easy!