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MORTGAGE KNOWLEDGE CENTER

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CONVENTIONAL LOANS

Rates starting at % (APR %)¹

 

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1. Discover you’re eligible to become a PenFed member

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  1. Home
  2. Mortgage Knowledge Center
  3. 7 Things to Know Before Buying in a Gated Community

MORTGAGE

7 Things to Know Before Buying in a Gated Community

What you'll learn: Pros and cons of gated communities, types of properties, amenities and more.

EXPECTED READ TIME: 4 MINUTES

Updated August 23, 2023

7 Things to Know Before Buying in a Gated Community

 

In the realm of real estate, gated communities hold a special appeal for homebuyers seeking security, exclusivity, and a host of amenities. These residential enclaves offer a heightened living experience – but before making the decision to invest in a gated community, it is important to understand the intricacies involved and the factors to consider. This comprehensive guide explores seven essential aspects that every prospective buyer should know before purchasing a home in a gated community. Whether you are interested in 55+ communities, luxury gated neighborhoods, or simply curious about the benefits they offer, this article will provide valuable insights for U.S. homebuyers who prioritize uniqueness, security, and exclusivity.

What is a Gated Community?

A gated community is a residential area that limits access to authorized individuals through physical barriers such as walls, fences, or gates. These communities range in size and style, encompassing everything from suburban developments to urban enclaves. The primary purpose of a gated community is to provide residents with a heightened sense of security, privacy, and exclusivity. With controlled entrances and restricted access, these communities create a tranquil and secure living environment for their residents. Whether you envision a peaceful suburban retreat or an urban oasis as your next place to call home, understanding the concept of a gated community is the first step in exploring this distinctive housing option.

Types of Gated Community Homes – Homes vs. Condos:

Gated communities typically offer a range of housing options, including single-family homes and condominiums. Single-family homes are an ideal choice for those seeking spacious layouts, private yards, and a greater degree of independence. These homes often come with various floor plans and customization options, allowing homeowners to tailor the property to their specific needs.

On the other hand, condominiums in gated communities offer a low-maintenance lifestyle with shared amenities and community spaces that offer a pleasant community experience for residents. Condos provide an attractive option for individuals who prefer a more hands-off approach to property maintenance and appreciate the benefits of communal facilities such as swimming pools, fitness centers, and clubhouses. When considering a gated community, evaluate your lifestyle preferences, maintenance responsibilities, and financial considerations to determine whether a single-family home or a condominium would align better with your needs.

Gated Communities for Seniors:

For seniors looking for an active and secure retirement lifestyle, 55+ communities have become increasingly popular. These age-restricted neighborhoods cater specifically to older adults and provide a range of amenities and services tailored to their needs. From golf courses and fitness centers to social clubs and organized activities, these communities offer opportunities for recreation, socializing, and pursuing new interests. Opting for a gated community tailored to active seniors enables individuals to relish a dynamic and stimulating living atmosphere, while nurturing meaningful bonds with fellow residents who have comparable life journeys.

Benefits and Amenities of Living in a Gated Community

One of the key attractions of gated communities is the array of amenities they offer, transforming residential living into a resort-like experience. Living in a gated community provides access to a host of facilities designed to enhance residents' quality of life. Common facilities found within these communities can include swimming pools, fitness centers, tennis courts, parks, walking trails, and even private golf courses. These amenities promote an active and healthy lifestyle, offering convenient opportunities for exercise, relaxation, and recreation without leaving the comfort of your own neighborhood. 

Additionally, gated communities often foster a strong sense of fellowship, providing opportunities for social interactions, organized events, and shared experiences. From neighborhood gatherings to book clubs and holiday celebrations, residents can engage with their neighbors and build lasting relationships. Amenities such as these make gated communities an attractive choice for individuals and families seeking a well-rounded and enriching living environment.

However, keep in mind that communities which make these amenities available, typically have higher homeowner's dues. Make sure you take these fees into account when you're looking at how much home you can afford.

Evaluating Safety Measures

When it comes to choosing a place to call home, safety is of utmost importance. Gated communities are renowned for the added security measures they provide, offering residents peace of mind and a reduced risk of unauthorized individuals entering the neighborhood. These communities employ various security measures such as controlled access points, surveillance systems, security personnel, and well-defined emergency response protocols. The physical barriers and restricted entrances act as a deterrent to potential intruders, creating a safer living environment.

It might be a good idea to research the specific security measures in place within a gated community to ensure they align with your expectations. Factors to consider include the presence of security guards, the effectiveness of surveillance systems, the reliability of access control systems, and the community's reputation for safety. Conducting due diligence in this area will help you make an informed decision and choose a gated community that prioritizes the security and well-being of its residents.

Investment Potential

Gated communities are known for their well-maintained properties, desirable living environments, and a sense of exclusivity. As a result, homes within gated communities often experience higher property values compared to surrounding areas. The combination of security, privacy, and enhanced amenities contributes to the desirability of these communities, attracting potential buyers willing to invest in a premium lifestyle.

It is important to consider the broader real estate market trends and factors that influence property values when evaluating the investment potential of a gated community property. Factors such as location, proximity to amenities, market demand, and the community's reputation will play a role in determining the long-term value appreciation of your investment. Consulting with a real estate agent familiar with the local market and trends can provide valuable insights into the potential for growth and return on investment in a particular gated community.

Unlocking Potential in Gated Communities

Buying a home in a gated community offers a unique living experience characterized by security, privacy, and a wealth of amenities. By understanding the concept of gated communities, the types of homes available, the benefits for seniors, the array of amenities, the importance of safety, the impact on property values, and the mortgage options, you can make an informed decision that aligns with your preferences, lifestyle, and financial goals. Remember, when it comes to finding the perfect home in a gated community, thorough research and due diligence are key to crossing the threshold of a home you love.

Get your step-by-step guide to home buying with our free eBook.

For more information about PenFed Mortgages:
 

PenFed Mortgage: 

800-970-7766

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image

CONVENTIONAL LOANS

Rates starting at % (APR %)¹

 

Apply before becoming a member.

After your application, we’ll help you:

1. Discover you’re eligible to become a PenFed member

2. Open a Savings/Share Account and deposit at least $5

Home Buying Steps

  • Getting Started
  • Finding a Home
  • Getting a Mortgage
  • Home Ownership

Mortgage Topics

  • VA Loans
  • Conventional Loans
  • First Time Homebuyer
  • Home Equity
  • Homebuying 101
  • Checklists
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  • PenFed Top 10
  • Refinance
  • Jumbo Loans
  • FHA
  • Videos

Mortgage Products

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  • Home Equity

PenFed HELOC

Rates as Low as % APR* with flexible use of funds

Apply before becoming a member.

After your application, we’ll help you:

1. Discover you’re eligible to become a PenFed member

2. Open a Savings/Share Account and deposit at least $5

Disclosures

1Except for holidays, rates are updated Monday through Friday at 10:15am EST. The advertised rates and points are subject to change. The information provided is based on discount point, which equals percent of the loan amount, and assumes the purpose of the loan is to purchase a property with a 30-year, conforming, fixed-rate loan. Loan amount of $400,000; loan-to-value ratio of 75%; credit score of 760; and DTI of 18% or less. The property is an existing single-family home and will be used as a primary residence. The advertised rates are based on certain assumptions and loan scenarios, and the rate you may receive will depend on your individual circumstances, including your credit history, loan amount, down payment, and our internal credit criteria. Other rates, points, and terms may be available. All loans are subject to credit and property approval.

*Prime Rate is % as of . The APR for this Home Equity Line of Credit (HELOC) is based on prime plus a margin and can change monthly. Fixed Rate Advances will be amortized over the Fixed Rate Advance Term, with the payment consisting of principal and interest. Your Annual Percentage Rate for a Fixed Rate Advance will be calculated by adding your Prime Rate, your Margin, and the Additional Fixed Rate Lock-In Margin. Your Annual Percentage Rate for a Fixed Rate Advance shall not exceed 18% and shall be equal to or greater than % for primary residences and second homes.

  • Annual Fee: Notwithstanding the foregoing, an annual fee of $99 will be assessed on each account anniversary.
  • Home equity lines of credit (HELOC) are variable rate loans and the interest rate is subject to increase after consummation of the loan on monthly basis. Closing costs range between $500 and $8,500 for credit lines of $500,000. Contact a representative for additional details.

Appraisals: PenFed will attempt to establish value via an independent method. If that method is unsuccessful, or the value is not sufficient for the amount requested, an appraisal will be required regardless of CLTV. An appraisal is always required in the following circumstances:

For all loans with a loan amount greater than $400,000.

If an appraisal is required, it must be ordered by PenFed. You will be contacted for authorization and payment prior to ordering. Appraisal fees average $550 to $850 (some run higher).

  • Closing Cost Credit: PenFed will pay most closing costs associated with a home equity line of credit (HELOC), which includes credit report, flood certification, settlement/closing, property ownership and encumbrances search, recording, property search, and quick close. Member is responsible for any city, county, and/or state taxes if the subject property is located in FL, LA, MD, MN, NY, TN, or VA. If an appraisal is required, the member, who is responsible for the fee whether or not the loan closes, will pay the cost.

Interest may be tax deductible, consult a tax advisor for further information regarding the tax deductibility of interest and charges.

Fixed Rate Advance Lock-In You may lock in an Annual Percentage Rate for Advances during the Draw Period. During your Draw Period, you may choose to have three separate Fixed Rate Advances locked in at any one time, with a maximum of two new Fixed Rate Advances per calendar year. Each Fixed Rate Advance must equal or exceed Ten Thousand Dollars ($10,000.00) and you may not request a Fixed Rate Advance that would cause the amount you owe to exceed your Credit Limit. The only term option for your Fixed Rate Advance is 240 months (“Fixed Rate Advance Term”). However, the term of your Fixed Rate Advance cannot exceed your Repayment Period.

Fixed Rate Advances will be amortized over the Fixed Rate Advance Term with the payment consisting of principal and interest. Your Annual Percentage Rate for a Fixed Rate Advance will be calculated by adding your Prime Rate, your Margin and the Additional Fixed Rate Lock-In Margin. Your Annual Percentage Rate for a Fixed Rate Advance shall not exceed 18% and shall be equal to or greater than % for primary residences and second homes and 4.75% for investment properties.

Property Insurance: Property insurance is required.

Multiple PenFed Loans: Multiple PenFed Equity loans and HELOCs are available as long as the member and collateral qualify (except Texas). For Equity loans and HELOCs the total indebtedness cannot exceed $500,000 for all PenFed Equity and HELOCs combined.

PenFed does not lend on:

  • Mobile homes
  • Co-ops or time-shares
  • Properties that are currently listed on the market for sale
  • Commercial property or property used for commercial purposes, even if a residence is part of the property
  • Undeveloped property (land only)
  • Properties with more than 4 units

Properties that are currently under major construction/renovations: Property must be fully livable, with no safety issues. (Examples: no missing rails from stairs/decks, no open walls with wires showing, missing kitchen appliances/counters, missing bath fixtures or unfinished pool).

  • Additional limitations may apply

Home Equity Line of Credit:

  • This Account has a Draw Period of 10 years, followed by a repayment period of 20 years.
  • If only minimum payments are made during the draw period, the loan balance will not decrease.
  • In Texas, the maximum CLTV available is 80% on owner occupied properties. Additional restrictions apply in Texas, so please ask a representative for details.
  • In all other states, the maximum CLTV is 85% on owner occupied properties and second homes. Additional restrictions or requirements may apply based on application characteristics.
  • Property type of Condo has a maximum CLTV of 80%.
  • The maximum CLTV available is dependent on credit qualification.
  • Rates vary depending on owner occupancy and CLTV and other loan criteria.

Minimum Loan Amount Requirements in all States:

  • For an owner occupied property or second home the minimum loan amount is $25,000 and the maximum amount is $500,000 with a CLTV of 85% or less of the fair market value.

Other terms and conditions apply; call 844-918-4307 to speak with a representative for details. All rates and offers are subject to change without notice. To receive advertised product, you must become a member of PenFed.

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This credit union is federally insured by the National Credit Union Administration. Rates are current as of September 2023 unless otherwise noted and are subject to change.

APY = Annual Percentage Yield
APR = Annual Percentage Rate


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You are leaving PenFed.org and entering a third party site. PenFed Realty, LLC is wholly owned by PenFed and this referral may provide PenFed a financial or other benefit.


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IMPORTANT NOTICE

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The content you are about to view is produced by a third party website that is unaffiliated to Pentagon Federal Credit Union. PenFed takes no responsibility for the content of the page.


IMPORTANT NOTICE

You are leaving PenFed.org and entering a third party site. PenFed Title, LLC is wholly owned by PenFed and this referral may provide PenFed a financial or other benefit.


For more information about the relationship between PenFed and PenFed Title, LLC, see the Affiliate Business Arrangement Disclosure.


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