Nobody ever thinks about their home inspection when shopping for a mortgage. People are starting to realize the importance of having a home inspection.
When it comes to a residential real estate transaction, then financing and home inspection happen to be 2 of the supremely important factors. Most importantly, it has been observed that more often than not they have a direct effect on one another. There can arise certain situations even after you’ve done the necessary formalities regarding mortgage loans wherein it’s a direct result of home inspection contingencies and financing.
The relationship between home inspection and mortgage
Home inspection and mortgage have a unique symbiotic relationship, but it’s a fact that ignoring these 2 aspects can call for unnecessary trouble as far as real estate deals are concerned. Enlisted below are certain situations that need closer analysis when you’re dealing with the real estate.
- The lender and his concern about the property’s condition
It’s no secret that the lender obviously has a vested interest in the condition of the property in concern. However, what’s of greater concern to the lender is the appraisal and the appraised value of the particular property. Here’s why home inspection is so very important given this particular factor. It basically helps the purchaser understand what the condition of the property is like. Generally an expert is hired to help identify those concerns that are associated with the condition of the property.
Now, what exactly does the appraisal do? The appraisal is mostly to help the lenders understand the condition of the property. This is because the appraisal relates to the property’s value in relation with the amount that’s being loaned to the purchaser. As for the collateral of a loan, then in a traditional mortgage transaction it’s the property. This goes on to mean that if the borrower happens to default on the loan, then the lender can force the sale of the property in concern for the purpose of repayment of debt.
- The suggestion of an improper resolution in case of a discovered defect
Now, if it so happens that the lender might come up with an improper resolution if any defect is discovered in the home inspection, then there are a plethora of resolutions that can be put to use. There can be situations wherein the lender just mightn’t agree with the parties’ resolution and then comes the question about mortgage loans. However, it needn’t come to that provided the lender’s resolution is accepted. On the other hand, this can also be interpreted in a slightly different manner. That means there can be instances when certain suggestions coming from the lender might be like a red flag signal for the parties.
- The necessity of home inspection in an FHA or VA loan transaction
There’s a third element involved when it comes to highlighting the relationship between a home inspection and the lender. This role is played by property and especially in specific types of mortgage loans. For instance, the FHA loans require a home appraisal that’s almost similar to that of home inspection. It doesn’t really guarantee for the condition of the homes. As a licensee one should make sure of certain facts. That also includes those houses that have been funded by the FHA and VA loans. Basically the buyers need to understand the importance of having an inspection done on each and every property.
Keep in mind the 3 situations discussed above when it comes to getting mortgage loans on a real estate property. It’s rather important that you get a home inspection done, for only then will things go the proper way. After all a real estate venture can go a long way and do a lot for your finances.