Although lenders generally won’t require you to have a home inspection done, it is highly recommended that you schedule an inspection before proceeding with your mortgage application.
So you’ve just found the house of your dreams. It’s reasonably priced, and the seller has agreed to sell it to you (congratulations!), so now all that’s left is to apply for a home loan.
But there’s just one issue: You don’t have a home inspection report to prove your home was inspected, and you’re wondering, can this cause your mortgage application to be denied?
Mortgages and Home Inspections
While a home inspection is necessary when buying a home, mortgage lenders generally don’t require one. In most cases, they’ll only ask for a wood-destroying organisms report (WDO) and an appraisal report. The former certifies that the property is free from destructive organisms such as termites and fungi, while the latter shows the property’s market value. These two reports help the lender know if the home is worth the money — in other words, it helps ensure they’re not originating a home loan that’s too risky.
That said, it’s worth noting that, in some rare cases, mortgage lenders may ask you to get a home inspection. For example, suppose the pest control or appraisal report highlights some structural defects in the home. In that case, the underwriter may require a home inspection to determine if the house is worth investing in.
Home Appraisals Vs. Home Inspections: What’s the Difference?
Both services (home appraisal and inspection) help uncover hidden issues, providing the home buyer with a complete picture of the investment. But that’s where the similarities end.
The main difference between these two services is that an appraisal evaluates the home’s value based on its condition and similar properties in the neighborhood. In contrast, an inspection is used to determine the overall condition of the house.
Having a Home Inspection is a Good Idea
Although lenders generally won’t require you to have a home inspection done, it is highly recommended that you schedule an inspection before proceeding with your mortgage application. Here’s why:
- Helps in uncovering hidden issues: Having a home inspection done will help you identify any mechanical, plumbing, and pest issues and have the seller fix them before you purchase the home.
- Pinpoints potential future problems: A home inspection won’t just reveal current issues with a home. It’ll also provide an in-depth analysis that can pinpoint issues that may become a problem in the future. If you can identify potential problems before they happen, you can take the necessary measures to address them.
- Gives you an upper hand in negotiations: If a home inspection reveals significant problems, you can negotiate with the seller to lower the price of the house.
Need a Mortgage Loan?
Are you in St. Louis, Missouri, and looking for the best home loan deals? The Sean Zalmanoff Mortgage Team is your go-to partner. We have a professional team dedicated to making your home purchase or refinancing as smooth as possible. Contact us today for more information.