Freehold or condo: What’s the difference?
When you are ready to make the leap into homeownership, one of the key decisions you will likely face is choosing between a freehold or condominium – and your choice can have a significant impact on both the cost of a home and how you can use it.
In this light, we look at these two forms of property ownership and examine their characteristics and differences to help decide which one fits your needs.
What is a freehold?
A freehold is perhaps what most people think of as “owning a home,” mainly because most detached homes and some semi-detached home fall under this ownership type.
According to the Canada Mortgage and Housing Corporation (CMHC), a freehold is a type of property ownership where you own both the building and the land that the building is on for an indefinite period. This means that you are free to add or remove structures and make changes to the property, subject of course to provincial and municipal zoning laws, bylaws and permits.
While freehold homes may offer greater flexibility and privacy, they can also be more expensive to purchase and maintain. But if you can afford the cost of ownership, a freehold might be right for you.
What is a condo?
Meanwhile, apartment and townhome units in property complexes are commonly referred to as condominiums (also known as strata in some provinces).
When you buy a condo, you will own your unit but common areas – including exterior walls, windows, gardens, driveways, hallways, elevators, lobbies and social areas – are jointly owned by all residents. A condominium corporation maintains these areas by charging a monthly condo fee, which forms part of your occupancy costs. The condo corporation can also “regulate the types of changes you can make to your unit,” according to CMHC.
If you are looking to buy a condo unit, keep in mind that condo fees can vary depending on factors such as the type of unit you buy, the building it is in and the range of amenities you can access. For instance, amenities and conveniences such as private gardens, gyms and swimming pools can all lead to higher fees.
How to find financing for your home
Whether you choose a freehold or condo, a skilled mortgage broker will be able to guide you through the financing process to help you buy your home. This is because mortgage brokers have relationships with different lenders and can help connect you with one that has the best mortgage solution for you.
You can ask them about financing options such as those offered by Home Trust when you are ready to start your journey towards purchasing a new home.
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