Usually the purchaser will do an inspection of the property prior to entering into a contract of sale to make sure the property has no hidden problems. This should especially be done if the property is being sold as-is.
Having said that... with a conventional mortgage the bank does not require an inspection, all the bank requires is an appraisal which is very different. Appraisers simply formulate an opinion of value for the property based on current market conditions and sales. They do not check for defects or problems within the house. If a purchaser is going for an FHA or VA loan, the bank does do a more formal inspection when the appraisal is done, but still it is not the same as you hiring an inspector to come in yourself. With FHA and VA, they simply want to make sure that the plumbing, electric and mechanicals and condition of the home is up to par so to speak. With FHA or VA loans, if the heating system, electrical system, roof or overall condition of the property is bad, the bank may require repairs to be done in order for them to be willing to lend on the home.
With out seeing the actual repairs you are speaking of, it is hard to say if it would be an issues or not, but if you are going with a conventional loan it is a moot point because you will not have a problem, all you have to worry about in that case is the home appraising for the price you are paying for the house.
Mitchell S. Feldman
Associate Broker/ Director of Sales
Madison Estates & Properties, Inc.
Office: (718) 645-1665/ Cell: (917) 805-0783
As far as inspections, it all depends on what repairs the house needs and what the total cost of repairs is. It's possible that the bank will require a HUD consultant to inspect the house. No bank will require you to do a engineer inspection, though it is strongly suggested. Aside from an appraiser, this is pretty much it!
If you're in need of a Loan Officer, I'm always available. Good luck!
Senior Loan Officer
Sterling National Bank
The bank will not make it mandatory for you get a home inspection but you may not be able to get Conventional financing for a property that needs repairs.
If the property has repairs needed for health and safety reasons then the property would not pass the appraisal. At that point you would have to apply for a FHA 203k renovation mortgage. This loan allows you to borrow the funds to purchase the property and the funds for renovations all in one loan. So you will have one mortgage, one monthly payment and one set of closing cost to pay. You can put down as little as 3.5% of the total acquisition cost (sales price + renovation cost).
I would be more than happy to speak with you and go over how this loan works. I am actually a renovation mortgage specialist with Wells Fargo in Brooklyn, NY and I specialize in 203K renovations financing. Please feel free to give me a call at 718.780.9110.
Good Luck and hope to speak to you soon!
A home inspection is a must for every homebuyer. Not because a bank requires it, but simply because you should know what you are buying. A lender will require an appraisal which will note any obvious signs such as staining from water damage or holes in walls. However, this is not a substitute for a trained engineer looking for issues that are not apparent to the untrained eye.
Licensed Real Estate Associate Broker
KIAN Realty NYC, LLC
450 7th Ave Suite 1501
New York, N.Y. 10123
Off: 212-757-8268 x 220