The mortgage approval process can be an exciting albeit tumultuous journey. It’s an opportunity for you to evaluate your finances and ensure they are in order before you purchase a home. With plenty of paperwork, it’s easy to get caught up in the process, and you might be worried you are missing a step, such as a home inspection, that could disqualify you from approval.
Can you get a mortgage without a home inspection? The short answer is yes. However, the state of a home should be more of a concern to the buyer rather than the lender. As a result, homebuyers prefer having an inspection done, especially in the case that their mortgage approval has conditions. homebuyers are getting home inspections, although they are not needed. This guide reviews some of the reasons it’s a good idea to have your future home inspected and what happens after you get the results.
What is a Pre-Purchase Home Inspection?
It’s not uncommon for homes to have problems, depending on their location, condition, and age. It is best if buyers go in with an open mind and an intent to fix up some things if necessary. However, you’ll need to account for the cost of home improvements when determining whether you can afford the home you’re about to make an offer on.
A home inspection helps buyers know more about the property they may purchase. Inspectors look for common home issues that include plumbing, electrical and roofing problems that might not be apparent when the buyer walks through the front door. The primary reason you’d want to get a home inspection is to know how much additional investment is needed to bring the home up to the current code after you buy it.
Who Can Provide a Pre-Purchase Home Inspection?
You can choose any home inspector you like, but you should ensure that whoever conducts the inspection has plenty of experience and quality reviews. Knowledgeable home inspectors know how to locate problems throughout the interior and exterior of a home and don’t glaze over necessary details. Some of the issues an inspector might encounter include the following:
- Roofing that needs to be replaced due to leaks or excessive wear and tear
- Eroded or ineffective insulation that needs to be removed and replaced
- Structural issues
- The presence of mould, mildew and other microorganisms
- Plumbing problems and water damage throughout the home
- Electrical system dangers such as wiring, fuses, and outlets that may pose a safety hazard
- Problems with the HVAC system in the home
- Damage to the home’s exterior, such as worn siding, windowpanes, or doors
- Air quality issues due to the presence of radon, asbestos and other irritants
The Benefits of a Home Inspection
A home inspection provides an unbiased evaluation of the home that includes less flattering details about the property that may not be immediately apparent. This information is vital to ensure your new home is safe and habitable before moving your family in. It also helps with estimated repair costs if you wish to proceed with the sale and fix the problems yourself.
Most homes require some degree of repairs after changing hands, so your home inspector will likely find something that requires your attention. In the best-case scenario, your inspector will highlight minor issues you can either live with or repair rather quickly. If you’re buying an older home, the inspection may determine whether you make an offer because it could show you the actual depth of renovations you need to do before it becomes your dream home.
Understanding the Details Included in a Home Inspection
Home inspectors won’t find every single problem with a home, but they’re self-trained to look for specific issues that tend to cost a lot of money to repair. For example, they will inspect the home’s foundation for cracks and other problems because foundation repair costs can be thousands of dollars. The inspector will also check sewer lines and plumbing to ensure that everything is up to code and that you don’t have water damage that threatens your home’s structural integrity. When inspecting the electrical panel and wiring system, the inspector wants to ensure that your home’s fuses, outlets and other vital components aren’t at risk of causing a fire. The inspector also makes sure that the HVAC system works as it should.
Inspectors typically offer estimates for repairs that give a broad range based on what local contractors could charge for the work. The final cost will depend on the extent of the damage and who you hire to do the job.
The Difference Between an Appraisal and an Inspection
Often, mortgage lenders require home appraisals as a condition for offering a mortgage because they need to ensure they know the true value of the collateral on your loan. Home inspections are rarely a requirement unless the appraisal finds something the lender is particularly concerned about. The primary difference between these two is that an appraisal determines the house’s value, while an inspection reveals its condition.
A home inspector can identify potential problems that need to be fixed immediately and estimate what it will cost to hire someone to perform the repairs. A home appraiser simply tells you whether the home is worth what the seller is asking for or if you might be overpaying for the property.
Can a Buyer Back Out After an Inspection?
You can make a conditional offer on a home that requires it to meet certain expectations. One of the conditions you can include in your offer is that you’re allowed to have the home inspected. You can then ask the seller to fix issues the inspector finds or reduce the property’s selling price.
Understanding Conditional Home Sales
In recent years as the result of an overly hot real estate market, many buyers tended to shy away from making conditional offers on a home because other buyers may not have had the same expectations. However, as the market returns to normal, home inspections are once again vital to the sale. Nowadays, most purchase offers have conditions on financing and inspections.
If you love the idea of a fixer-upper, perhaps a construction mortgage would work better to help you fund your renovation project to finish the home of your dreams. At Chris Allard Mortgage Team, we have extensive experience with mortgages of all kinds and can help you secure a mortgage that suits your needs. Contact us today to learn more about our services.
Chris Allard’s experience in the field means he can get you offers with over 50 financial institutions lending in Ottawa. Every lender has many mortgage products they offer, which means Chris and his team will make sure a mortgage caters to your needs while also ensuring you get a competitive rate. Chris Allard is a proud mortgage broker of Smart Debt Mortgages, independently owned and operated. Smart Debt broker #12236.