You found your dream home and getting an FHA appraisal is a financing requirement per your mortgage lender. But your Realtor insists all smart home buyers should get a home inspection report. When all is said and done, you're left wondering why you had to pay for both.
The truth is, the required FHA appraisal is not sufficient for your needs as a home buyer. It does not adequately guarantee the home's condition. So then, why pay for one?
An FHA appraisal is required by the lender to estimate the home's value based on the current real estate market. It verifies the sales price is reasonable for the neighborhood so that the property will not be over-financed.
The appraisal also makes sure the house meets minimum FHA loan requirements. The appraisal report includes a cursory look at the heating, plumbing, and electrical systems, as well as the the roof, foundation, and any safety issues.
Simply put, the FHA appraisal meets the basic requirements of the mortgage lender by addressing value and condition. But as the future owner, you need more details on the state of the property than an appraisal can offer.
Unlike the appraisal, a home inspection report is 100% geared to a home buyer. Not only does it evaluate the general condition of a home, it offers an in-depth written analysis, detailing immediate and future repairs from toilet seals to a roof.
So insist on a home inspection. By the way, you'll impress your real estate agent and surprise your mortgage lender with your understanding of the FHA appraisal vs an inspection. Just happen to work into the conversation that you know an appraisal is required by mortgage lender while the home inspection is for your benefit!
And rest assured, you won't be wasting your money on the inspection. Both the FHA appraisal and the home inspection report are necessary steps for successful home buying.
There's so much more to discover about FHA mortgage loans. I've made it easy for you! Go next to FHA Streamline Refinance.
What if you could ask a mortgage insider anything you wanted regarding the FHA loan program? Now you can. Ask Kate is specifically designed to answer your questions and create dialog regarding mortgage financing.
Here is my recommendation for this Reader on VA Appraisal Guidelines.
You'll also find a wealth of information at Kate's Best Mortgage Rate Blog packed with the latest additions to this website, interest rate updates and a fresh approach to homeownership.
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September 2015: Fannie Mae and Freddie Mac Improve Loan Modifications.
Keep on the right path at A Homeowner's Survival Guide to the Intimidating Mortgage Process.
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Aug 11, 16 10:49 AM
Aug 11, 16 10:18 AM