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Inspections and Loans

Inspections and Loans

While a poor home inspection will usually not deter a lender from granting a home loan, you should be aware that some lenders will not grant a loan if there is termite damage or structural damage to the home due to water or age.

This will also lower the overall appraisal of the home, which could be another issue that lenders may have when deciding to approve a home loan.

If the home inspection is not favorable, ask your lender what will need to be done in order to rectify the problem. Many times removing the termites and correcting the water damage is all that will be needed. Many times homeowners will foot the bill for these types of repairs.

Additional Fees For Home Loans

You may notice that you will have to pay small fees throughout your home buying experience. It seems that every piece of paper you sign, file, or request will cost you some money. Here is a list of fees that you may be charged:

  • Credit report fee
  • Loan discount fee
  • Lender’s inspection fee
  • Appraisal fee
  • Loan origination fee
  • Mortgage insurance application fee
  • Assumption fee
  • Hazard insurance
  • Title search, and
  • Title insurance

These fees can add up, so you will want to be prepared and have a little extra in savings for when these fees come up. Some of these fees can be put off until the closing, but you should be planning for them in advance.

Good Faith Estimates

Many lenders have turned to good faith estimates that are supposed to help you afford your new home. Many of the above mentioned fees may be added up and paid at the closing.

When looking for a lender, you should compare good faith estimates to see which lender is the lowest, which are the highest, and which are in the middle. All too often these estimates are too low. Some lenders will do this on purpose in order to get you to take out the loan. By comparing estimates, you will be able to get a better idea of which lenders are honest and which is not.

As a rule, you should expect to pay between three and five percent of your loan in closing costs. A good faith estimate will give you an idea of the final cost, but you should keep track of what everything costs and try to have extra money set aside just in case.

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