Home Buying in Ravenna>Question Details

Jim, Home Buyer in Ravenna, OH

We are trying to buy a condo. We applied for a loan at our bank, but they say it is non warrantable. We will sell it in 5 years should we buy it?

Asked by Jim, Ravenna, OH Fri Sep 10, 2010

We are buying this for our son and a friend to live in while they are attending Med. school and was wondering if it is worth looking for another lender for financing? As I said we will probably only keep it for 4-5 years. Our lender said the problem is only 16 out of the proposed 200 units have been built and sold since 2004. This property was purchased in 2007 for $147,500 and was recently foreclosed on and Fanie May holds the title. Our offer of $84,900 was accepted. Currently the developer has similar units for sale priced at $123,900 (the economy!) What do you think we should do?

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James Deskins.... to answer your question "What does "non-warrantable" mean?"

Non Warrantable means that the condos do not meet the requirements to be sold to Fannie Mae or Freddie Mac.
A condo questionnaire is used to determine whether the criteria is met. There are MANY requirements but in this particular case if only 16 out of a proposed 200 units have been built and sold then that alone may be reason enough for this project to by Non Warrantable.
0 votes Thank Flag Link Fri Sep 10, 2010
These are all questions that an experienced local buyer's agent familiar with this particular area, one who is knowledgeable about condos would best be able to answer. Do you have a buyer's agent?

Non Warrantable condos can be quite difficult to finance although some lenders may be able to help you. You say you would be selling in 4-5 years. What if the original plans for the community are never completed? What if the HOA dues increase substantially or there are significant special assessments? What if the community is still Non Warrantable in 4 or 5 years when you are ready to sell? The developer could still be under pricing resales for years to come. So many variables to consider. Good Luck!
Web Reference: http://savannahgahomes.net
0 votes Thank Flag Link Fri Sep 10, 2010
What does "non-warrantable" mean? That's not a bank term. You mean you can't get mortgage insurance? Banks don't "warrant" anything so that's why I'm not sure what you mean. FYI, "units for sale" doesn't mean that's what they are worth. You need to see what has sold, not what's currently for sale. You may be trying to purchase a pig in a poke. It does sound like a good deal but these days you never know, especially with condos. Where are you purchasing? Why not consider a single-family home? Much less risk and easier to get a loan for.
0 votes Thank Flag Link Fri Sep 10, 2010
It is a great purchase price in this market and great interest rates. You should always speak to 3-4 lenders to ensure that all your questions are answered. Hope this helps
0 votes Thank Flag Link Fri Sep 10, 2010
It is a great buy and opportunity, It is wise to always look to atleast 3 or 4 lenders and see what they have to offer.
0 votes Thank Flag Link Fri Sep 10, 2010
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