As a Lehigh Valley Home Buyer, you may be considering an FHA Mortgage. This is a very common mortgage that many home buyers decide to use.
There are a lot of positives about an FHA Mortgage (3.5% down, able to include up to 6% in the purchase price to include the closing costs).
Having said that, a Home Buyer may want to look at a 3% Conventional Mortgage instead OR check to see if they have either option (FHA or 3% down Conventional).
Whether you do an FHA or Conventional mortgage both require an appraisal. The appraiser will go to the house and act as the eyes and ears for the bank.
- Is the home worth what you are paying for it?
- Does it need any major repairs?
- Are there any safety issues?
FHA Mortgage and Safety Issues
This is where the different mortgage types vary. The appraisal on an FHA Mortgage may identify items that need to be repaired/fixed due to safety issues.
- Well and Septic? Is the Well at least 50 feet from the septic tank and 100 feet from the drainfield or sand mound?
- Built before 1978 (possible lead paint)? Is there any flaked paint on the interior/exterior of the home or outbuildings?
- Deck? Are the spindles close enough to prevent a baby from falling through the openings or getting their head stuck?
These are just some of the issues that may come up on an FHA Appraisal. I am not aware of a complete list that we all have access to and can view ahead of time. A lot of it is left up to whether the appraiser considers it a Safety problem.
Safety Issues with an FHA Mortgage HAVE to Be Fixed! Isn't this GOOD for the Buyer?
Any Repairs identified in an FHA Appraisal MUST be Fixed in order for the Home Buyer to get the mortgage.
A Home Buyer should definitely want any safety issues corrected and it is Good that they were identified but what if the Lehigh Valley Home Seller won't agree to do them?
These issues CAN and Will Stop the Mortgage and Purchase of the Home. Someone, buyer or seller, will have to correct the issues on the appraisal.
Does the buyer have any other options? Are they willing to go paint parts of a house they don't own yet or switch to a Conventional Mortgage?
Will the Lehigh Valley Home Seller Accept an Offer that is Using FHA Financing?
Two things can typically stop a home seller from accepting an FHA offer.
The Seller knows and has disclosed problems with the home or Knows that the appraisal is "tougher" about condition and doesn't want to deal with it.
The well and septic tank are 20 feet apart, the exterior of the house has a lot of old flaked paint..etc. If the home has some of these items, that are typically tagged by an FHA appraiser, they may not want to accept the offer.
The Home Seller has more than one offer!
If it is a multiple offer situation, the seller may select a Conventional mortgage over an FHA mortgage even if the offered price is higher with the FHA buyer. Even if the Home Buyer waives all of the inspections, they don't have any control over the appraisal.
Other Lehigh Valley Mortgage Options
All mortgage types look at the condition of the home. It is part of the appraisal and contributes to what a home is Worth.
Last year, I had a conventional mortgage tag the garage door due to flaked paint. It wasn't because they were worried it was lead, it was because the door was in really bad shape.
USDA, VA, and FHA mortgages all tend to look for the Safety Issues plus overall general condition.
For all of your Lehigh Valley Real Estate information, visit www.lehighvalleyhomesonline.com