Question Details

Channie  Hill,  in Pleasant Hills, PA

Could termites prohibit a mortgage from being approved?

Asked by Channie Hill, Pleasant Hills, PA Wed Apr 15, 2009

Wouldn't the listing agent have to reveal the infestation in a new seller disclosure?

Help the community by answering this question:


Termites can be a structural issue for a buyer. Depending on how bad the infestation and where, what damage they have caused already and to what area. It can either be easily mitigated by a termite treatment, continued baiting system etc, whatever a professional in that area recommends. It should be done by the seller. If there is structural damage to the home (usually sill plates, joists etc) than they should be replaced or sistered by a contractor.
With that said, most mortgage companies do not require the home inspection report or termite inspection report anymore for their review. They will usually rely on the contracts of sale to show if any fixes are needed and negotiated. However, if it is a gov't loan, such as FHA etc, they do require termite inspection report as part of their required documentation on review of the loan. If there is an infestation, then the mortgage company will require that the home be treated before closing to be free of termites. If there is structural damage, they will require the damaged area to be fixed before closing. This makes sense so that their investment into the property is secure for the long term.
Here in NY I have found that seller's disclosure statement is filled out only 50% of the time, with sellers giving buyers a $500 credit at closing instead. They can disclose termites, but also say that it was treated.
Hope this helps!
0 votes Thank Flag Link Wed Apr 15, 2009
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