When you’re buying a home and going through the mortgage approval process, there are many things you must do; but is getting a home inspection one of them? The short answer is “no.” Typically, your mortgage approval is not contingent upon a successful home inspection.
Rather than a home inspection, your lender will require a home appraisal.
Home Inspection versus Home Appraisal – What’s the Difference?
A home inspection focuses on the condition of the property and all of the installed systems. It helps buyers identify any potential health and safety issues in the home.
A home appraisal focuses on determining the current market value of the house. The appraiser will use recent sales data in the local area, along with other tools, to figure out how much the property is worth in the current market.
In short, a home inspection protects the buyer. A home appraisal protects the lender. Since the home is technically the collateral used for the loan, your lender wants to make sure the property is worth what you’re paying for it.
Does this mean there’s no point in getting your home inspected? Of course not! Your home is probably one of the most expensive things you’ll ever buy. You want peace of mind knowing that you made a good decision and bought a home that’s structurally sound. Having a professional inspect your home provides exactly that. Should the home inspection reveal defects that you feel are too much to take on, you have the option to change your mind on the purchase (provided you listed that as a contingency in the offer). We always support our buyers who want a home inspection.
The FHA Home Inspection
If you’re getting an FHA mortgage, you will be required to get an FHA home inspection. This is not the same thing as a traditional home inspection conducted by a licensed home inspector. The FHA home inspection is usually conducted by the home appraiser. FHA requires the appraiser to determine the market value of the property as well as the overall condition of the house. So while the FHA home inspection can give you some peace of mind, it’s certainly not the same as a true home inspection.
Ultimately, you can get a mortgage without doing a home inspection. The real question is, “Do you want to spend several hundred thousand dollars on a home without doing one?”
Whether you’re applying for a mortgage or wanting to sell your home, you can find many great real estate tips on our Facebook page. If you’re thinking about buying or selling a home, we can help! Contact us today!