Have you ever heard of leased land?
This is common in Huntington Beach, Newport Beach, and Costa Mesa.
In these cases of leased land, there is a lease fee on top of the HOA dues for condos, or the purchase price of a house.
Usually when you buy a home, you buy the building plus the land underneath it. This defines the term fee simple ownership. Owning the property solely. When it is a leased land, someone owns the land underneath and someone else owns the building. If you see a listing that says “Land Type: Fee” this means it is a fee simple ownership, it does not mean that there are fees nor is it a lease.
There are a few pros and cons to leased land.
1. Pro- Usually homes on leased land cost less, therefore you can afford a nicer house.
2. Con- It can be more difficult to get obtain a loan on a leased land property. Lenders will want to be certain that the lease period does not run out before the loan is fully paid off. (If you want a 30 year loan, there will need to be over 30 years left on the land lease).
3. Con- You may run into similar issues when trying to resell your home in the future.
If you are interested in a home that is on a leased property and would like to be put in touch with lenders to obtain financing for this type, please contact me today.
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