Home Buying Process & Resources

Warrantable and non-warrantable Condos

Purchasing a non-warrantable condo is a tricky and complicated process. In fact, most Realtors don’t know what warrantability is or how it works. Many conventional lenders do not have non-warrantable finance options. The problem is, there are a lot of non-warrantable condos in Austin.

To put it simply, a warrantable condo meets the lending criteria established by Fannie Mae and Freddie Mac and has several financing options available. A non-warrantable condo does not meet Fannie Mae, Freddie Mac, VA, or FHA established criteria. Financing options are limited.

Questions to ask when buying a Condo

As a condo owner you are responsible for any maintenance and repairs within your unit. There is a Home Owners Association (HOA) fee that usually covers common area maintenance and sometimes insurance. Asking these 4 questions BEFORE you buy a condo will help save money and future headache.

Have there been any special assessments and will there be any special assessments in the near future?
What are the biggest complaints against the management company?
What does insurance policy cover?
What are the HOA rules?
How much cash reserves does the community have?
Is the condo warrantable?

Common Real Estate Terms You Need To Know

Appraisal, Closing Costs, Closing Disclosure, Conforming loans, Jumbo Loans, Conventional Mortgage Loan, Debt to Income Ratio, Discount Point, Down Payment, Earnest Money, Escrow, FHA Loan, Fixed­Rate Mortgage (FRM), Interest Rate, Mortgage, Pre­Approval, Principle, Interest, Taxes, Insurance (PITI), Private Mortgage Insurance, Refinance, Seller’s Disclosure, Underwriting, and Underwriter.

Questions To Ask Your Lender

I’m new to this process. Can you walk me through a standard loan process from start to finish?

Can we go over the 3 best loan options for me?
FHA, Conventional, Jumbo and 80/10/10
Will any of these loans have a prepayment penalty?

What are my down payment options?
5%, 10% and 20% are the most popular.
Ask how much Private Mortgage Insurance will cost if you are putting less than 20% down

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