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Is A Home Inspection Required For A Conventional Loan?

December 3, 2020

Buying a new homeCouple holding a house keychain. Home inspections are generally not required for a conventional mortgage loan can be an exciting time for a home buyer, but the paperwork and formalities involved in the process can be confusing. Many buyers wonder is a home inspection required for a conventional loan before the sale can be completed? This depends on the type of loan involved as well as several other factors.

What Home Inspections Are Required?

Home inspections are generally not required for a conventional mortgage loan, but they are a good idea to give buyers a better picture of the condition of the property. However, lenders will usually require a home appraisal before funding a loan.

Appraisal Inspection

An appraisal is not the same thing as a home inspection. While an inspector will look at the condition of the property and identify safety issues, an appraiser’s main focus is determining the home’s current market value. They will look at recent sales data in the area and use other tools to calculate how much the property is worth under the current market conditions.

Mortgage lenders usually require home appraisals to ensure that the property is worth the amount of money the buyer has agreed to pay for it. Because the property is being used as collateral for the loan, it is important to ensure that it will cover the full amount if the borrower defaults.

An appraisal is less thorough than an inspection and will look at the property’s size and overall condition. Although a property does not need to be in perfect condition, things must be in working order to pass.

Safety

Image depicting home appraisal. Home inspection is not required for a conventional loanIn the appraisal, the home will be given a quality rating by the appraiser that will reflect the property’s overall condition and quality. Although certain problems will not be deal-breakers, any deficiencies that are found in the home during the appraisal cannot affect its safety.

One safety issue that an appraiser might identify is peeling paint. If the home was built before 1978, it may contain toxic lead-based paint, so any paint peeling around the structure must be addressed. Similarly, if stairs lack properly secured handrails or have dangerous steps, the homeowner might be required to fix them.

In a home that has a septic system or private well, a lender might require water testing depending on the location and whether the appraiser notes something that could indicate contamination. In short, anything that could lead to unsafe living conditions will be identified by the appraiser.

Soundness

The appraisal report must also describe any physical deficiencies that could affect the property’s soundness. The age of the roof is one consideration. Appraisers will generally assume that a roof has a lifespan of 20 years and will want to see at least three years left or they may flag it in the appraisal.

Similarly, appraisers will flag major issues related to the home’s electrical, plumbing, heating, ventilation and air conditioning. Any systems that are not in working condition may need to be repaired before the bank will secure the loan.

Structural Integrity Of The Property

In addition, deficiencies in the home cannot affect the structural integrity of the property in any way. In some cases, if the appraiser finds an active roof leak or issues with the shingles, a qualified professional will need to inspect the roof to see if it meets the conventional loan roof requirements.

Home Inspection Not Required But A Good Idea

Although a home inspection is generally not required when getting a conventional loan, that does not mean that homeowners cannot or should not carry one out on their own to look for potential problems. A home inspection typically costs around $300 to $400. Many homeowners believe that is a small price to pay for the peace of mind that can come from carrying out some due diligence. It could also save them a lot of money in the long run and help them prepare for expenses that may come up in the near future.

Pest Or Other Inspection Only If Evidences Supports It

Building inspector looking at a property. Home inspections are generally not required for a conventional mortgage loanShould the appraisal find evidence of wood-boring insects, abnormal settlement or dampness, the appraisal should address their effects on the property’s value and marketability. Evidence that the condition has been corrected or that it does not pose any threat of structural damage may be required.

Any additions that have been made to the property that lack the required permits will also require the appraiser to note the work and assess its impact on the market value of the property.

In some cases, an appraiser may mark the appraisal as “subject to” if there are certain adverse conditions that require expert input, such as mold, water seepage, electrical or plumbing inadequacies, roof issues or environmental hazards.

Get In Touch With Conventional Loan Experts

If you are looking to buy a new home, get in touch with the conventional loan experts at My Lending Pal to learn more about their offerings.

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MyLendingPal, Inc, NMLS ID #1734346, (www.nmlsconsumeraccess.org); Corporate Office: 5400 Laurel Springs Parkway, Suite 304, Suwanee, GA 30024. Georgia Residential Mortgage Licensee #61544. Principal Loan Originator: Ricky Merchant, NMLS ID: 1517056. Georgia License # 54264. For questions regarding state licensing, please contact (404) 433-8918. Not all products and options are available in all states. Terms are subject to change without notice. Any rates or terms are speculative only and can change without notice.
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MyLendingPal, Inc
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Balachandar Sundaresan
Balachandar Sundaresan
17:30 23 Jun 20
Roger Merchant and his team were very helpful, right from getting a great rate to completing all process on time and being super responsive. Would happily recommend him!!
Dinesh Nair
Dinesh Nair
14:41 30 Jan 20
I would definitely recommend MyLending Pal for all mortgage needs. It all started with a great competitive quote on refinance and excellent service continuing all the way until closing. Priti, Ricky and Roger were a pleasure to work with.
Ramesh Kumar
Ramesh Kumar
02:03 17 Dec 19
I would really recommend Nations First Home Mortgage, if you are looking for the best home mortgage options. I was very much glad to work with this team and they have saved lot of time and money!!
gulshan rai
gulshan rai
03:21 17 Apr 19
I would highly recommend Mr Roger to anyone in the area looking for an amazing lender. He made the mortgage process so easy and effortless. I could tell him and his team were very attentive to all the details that came with applying for a mortgage and were quick to remind me of any deadlines that were approaching.It was super easy to work with Mr Roger.My special thanks to preeti who did an amazing job to get things done in the timely manner. If I had any questions, it was almost like she was waiting at her desk for my phone call to answer the questions immediately. The loans closed on time and without a glitch. I would highly recommend them to anyone
Ajith Nair
Ajith Nair
01:50 13 May 19
We highly recommend Roger for financing mortgage. Roger and his team were excellent through out the process and we had a very smooth purchase. They were always available when we had any questions. It was an amazing experience working with Roger and his team.
Pratul Patwari
Pratul Patwari
13:03 20 Jul 20
Roger Merchant and Priti Vin helped us in buying our first home. They understood our needs and took care of everything for us. They were very good with the communication through the process. They will always be my first choice in future for the mortgage services.
Sujatha Hariharan
Sujatha Hariharan
20:51 26 Jul 20
They were able to find me great rates. Service was quick and communication prompt. The loan process can be daunting as is the document gathering process but this was the easiest and quickest that I have experienced. Highly recommend!
Dinesh Nair
Dinesh Nair
15:53 30 Jul 20
I would definitely recommend MyLending Pal for all mortgage needs. It all started with a great competitive quote on refinance and excellent service continuing all the way until closing. Priti, Ricky and Roger were a pleasure to work with.
Manu Pushpanath
Manu Pushpanath
15:59 29 Jul 20
Great lender to work with. Right from document collection till closing they did it in 2weeks. The fastest closing I heard and get to experience myself. One improvement I suggest is it will be good if the closing attorney can come into the house for completing the closing. Considering current situation it will add a lot of value to the reputation. Thanks Milan and team for a good closing experience.
Sakthi S
Sakthi S
20:46 01 Sep 20
Would definitely recommend Roger and his team.Refinanced for the second time and with roger, I didn’t feel like I refinanced.The process was very smooth and fast.The rates were very competitive and it was amazingworking with Roger and his team.I’d recommend him for sure.
Sunny Patel
Sunny Patel
21:17 01 Sep 20
They were quick, courteous, and professional. They got me an excellent rate and helped make the process smooth. I would recommend using to my friends and family!
Emmitt Rathore
Emmitt Rathore
14:57 22 Dec 20
Roger helped us find an unbeatable rate!His decades of work in the industry made it easy for us to complete many processes with the lender, and helped us close on time!I will definitely be passing the good word around and recommending family and friends to him.I look forward to our next real estate transaction with them.
M Alamoti
M Alamoti
01:02 11 Jan 21
I had the experience of using their service. They know what they are doing. They are very honest, professional and caring. I have no doubt and hesitation to recommend them to anyone who is looking to purchase a home. I am very pleased for their service.
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