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Which is the Most Volatile Monthly Expense for Homeowners?

  1. Mortgage Payment? NO You can choose your own volatility. With a fixed rate loan, your mortgage payment will never change. If you choose a fixed plus variable rate loan, your mortgage payment may increase in the future but it should never be a surprise when it’s set to increase.

  2. Property Taxes? NO In most states property tax increases are capped per year. In California for example, they can only increase 2% according to Proposition 13. Your property taxes can actually decrease if your home’s assessed value falls.

  3. HOA Payment? YES! In California, HOA Dues are allowed to increase up to 20% every single year. If a 20% increase is not enough to cover the financial mismanagement by your Board and Association Manager, a 5% Special Assessment can be levied without owner approval. If the 20% + 5% Special Assessment still isn’t enough, a Special Assessment up to any amount can be put to a vote of owners. And, if it’s an emergency situation, your Board doesn’t even need to get owner approval to impose the Special Assessment.


If you’re thinking of buying into an HOA, make sure you have the HOA finances analyzed. If you already live an HOA, make sure to choose your Board wisely in addition to having the HOA finances analyzed every year.

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