Condominiums can be an attractive housing option, especially for first-time homebuyers.
They are typically less expensive than single-family homes. The average cost of a condo in October 2025 was $390,000 compared to $420,600 for a single-family home, according to the National Association of Realtors. They also can offer amenities that single-family homes and townhouses often do not offer, such as swimming clubs and exercise complexes.
But unlike the other housing types, condos have monthly fees to cover fixing and maintaining amenities and communal areas. They also can have special monthly or annual assessments that suddenly appear to fix an emergency repair.
Consider these factors as you determine if you can afford a condominium.
Calculate your income
Lenders will want to verify your total income and how long you've been at your job. Get ready to dig out tax and pay documents that you've filed away in a cabinet or collected in a shoebox. They also will want to know if you have any savings assets that you can tap into if needed to buy a home or make payments if you lose your job. This includes funds in retirement accounts and even money promised by relatives.
- Gather at least two months of pay stubs
- Round up at least two years of federal and state tax returns
- If you've recently received any cash gifts from relatives and want to use them for your home purchase, be sure to provide written verification such as a signed letter explaining they are a gift
- Document how much money you have in your savings account
- Document how much money is in any and all of your retirement accounts — a 401(k) plan that you have at work, for example. Federal law may permit you to use these funds to buy a home without getting hit with a penalty.
Pro tip: Self-employed applicants who do not have a consistent monthly income will need to produce even more documentation to prove it, such as additional tax forms, profit/loss statements from a self-owned business or statements from an accountant about the business’s earnings.
Organizing documents can be a tedious task. But they are your ally — helping you build your case to show you have the financial power to purchase a home. You'll want to take the same attitude toward organizing your debt documents.
Calculate your debt
Now that you’ve nailed down how much is coming in, determine how much is going out each month and how much you owe. Lenders will analyze this as a percentage of your monthly pre-tax income.
- Determine all of your outstanding debt — car loans, personal loans and the balances on all of your credit cards
- Next, calculate how much you spend each month on recurring debt, like monthly car payments or minimum credit card payments
- Add what you spend on monthly rent
- Divide that amount by your pre-tax income — what you would make if nothing was deducted from your paycheck
- The number is a percentage and is called your debt-to-income ratio. Lenders want to see applicants who spend less than 36% on their pre-tax income on monthly rent/debt payments
- Do another calculation using just the amount you spend on rent instead of other debts. Lenders want to see applicants who spend less than 30% of their pre-tax income on housing
Income and debt are powerful financial factors. Credit history rounds out your financial picture.
Assess your credit
Income and debt are powerful financial indicators. A third — creditworthiness — rounds out the data that shows you have the means to afford a condo.
- Contact one of the three major credit bureaus — Experian, Equifax and TransUnion — and get a copy of your credit report from each bureau
- Contact the bureau for any inaccuracies
- Consider sitting down with a lender or a bank manager to ask how you can improve your credit
Pro tip: You are entitled to a free copy of your report.