Monday, March 21, 2011

Q&A: Do I need a home inspection to finance a house?

Q:   If I buy a home and its listed "as is", do I have to have a home inspection before the bank will approve the loan, and will the bank give a loan on a home where repairs are needed?

In answer to the first question, no, you are never REQUIRED to conduct a home inspection prior to purchasing a home.  However, it is very strongly encouraged.  Consider  that you are spending  approximately $200, give or take, to protect your multi-thousand dollar investment.  It only makes sense.

 Now, as far as the loan, mortgage underwriters have become far more conservative with not just lending, but also with repair issues than in the past.  The lending crisis caused by more lenient lending terms has now caused the pendulum to swing far the other direction.

 In the past, FHA VA and other government backed loans were the only loans that required basic condition criteria to be met.  They addressed such things as roof life expectancy, peeling paint, broken windows, and the likes for repair prior to lending.  Now, it is not uncommon for all loans, including conventional, to review the notes of the appraiser or the and request repairs based on the appraisers comments.  The rules are not hard and fast, however.  It is independent for every lenders’ underwriter.  I will say, I have seen things in the last year that I have not seen in the previous 12 years, so this is an ever-changing market.  So, yes, it is possible the lender will require repairs prior to lending.

1 comment: