Home Inspection Versus An Appraisal When Buying A House

This Article Is About Home Inspection Versus An Appraisal When Buying A House

Many homebuyers in 2021 are first-time homebuyers. First-time homebuyers are not familiar with the home inspection versus an appraisal process when buying a home.  Gustan Cho Associates continue to educate our readers on the homebuying process. In this blog we will detail the following:

•  What a home inspection means
• The difference between a home inspection and an appraisal
• How to apply for a mortgage loan at Gustan Cho Associates

If you have been following our blogs, you may know there have been some changes to the appraisal process based on the COVID-19 coronavirus outbreak. Even home inspections have new procedures due to the pandemic. Many states only allow up to three people in a home at a time to complete the inspection. Check local mandates in your area for specifics. In this article, we will discuss and cover the difference between a Home Inspection Versus An Appraisal When Buying A House.

Difference Between A Home Inspection Versus An Appraisal When Buying A House

What is a home inspection? A home inspection is a key part of the homebuying process. As part of the contract and negotiations, a home buyer has a specific time window to complete a home inspection. This is where a professional inspector will come to view your property. A home inspection is not required by the lender, but it is a smart decision to make sure you are buying a home.

You want to make sure this investment will not be a money pit. During the home inspection, the inspector will complete a report going over many different items. These items may include electricity, the life expectancy of all major appliances, any visible damage to the property, foundation life expectancy, visible inspection for any roof damage, and looking out for any issues that may come upon the appraisal.

A home inspection report can be very detailed and can be a great tool for negotiating for seller credit. If the inspector finds something wrong with the property, this is a time you can ask the seller to fix it or offer you a seller credit so you can fix it upon moving in. This professional report is very detailed and will go over specific issues with the property. Below is an example of what you can expect to see on the inspection report.

What Is The Main Difference Between An Appraisal And A Home Inspection

As stated above, an appraisal is different from a home inspection. An appraisal is something that is required by the lender. The appraisal will put a value on the collateral or property. The appraised value gives the lender peace of mind knowing how much money they can lend you. Keep in mind, loan to value is based on the purchase price or appraised value, the lower of the two. So, if the home appraises for less than you agreed to pay for it, the lender cannot base your loan on the higher purchase price.

You would need to pay the difference in cash, or the seller will need to reduce the price of the property. After the real estate crash of 2008, all appraisals are now completed through a third-party appraisal management company or AMC. The lender may no longer know who the appraiser is. It must be completely random. This is to stop falsely inflating property values so there’s not another real estate bubble.

Importance Of A Home Inspection

A home inspection is a very important and relatively low cost for the potential items that will come up during the inspection. Throughout America, a home of her inspection ranges between $300 and $800. Depending on the size of the home and the area of the country, this price can vary dramatically. In a home inspection, something such as a hot water heater may need to be replaced, which will cost way more than $300-$800. That is why this is a key step in the homebuying process. You want to make sure you are buying a sound and sturdy home.

Buying a house is a long-term investment. You need to know what issues may arise in the near future. Many families complete a home inspection even when buying new construction. The majority of homeowners are buying pre-existing homes which will have wear and tear on them. It is important to know how to protect yourself from any future repairs and budget accordingly.

Buying A Home And Qualifying For A Mortgage

Applying for a loan at Gustan Cho Associates has never been easier. First, you will call Mike Gracz on 630-659-7644. Mike will talk you through all of the questions you may have. Mike will then explain the mortgage process from start to finish, go over your qualifications, and pair you with a licensed loan officer in your state. You will be sent an online application link that will prompt you with questions to complete your loan application.

If you have any questions during this process, simply call Mike Gracz. After you apply, a licensed loan officer will reach out to go over specifics with your mortgage qualifications. As part of the application process, you will need to send in supporting documentation showing your assets, employment, and identification.

Initial Documents Required To Process Mortgage Loan To Get Qualified

Below are some standard documents you should be prepared to send.

•  Last 60 Days Bank Statements – to source money for the down payment
• Last 30 Days Pay Stubs
•  Last Two Years W2’S
•  Last Two Years Tax Returns
•  Driver’s License

Once your licensed loan officer receives these documents, they will crunch your numbers and issue a preapproval letter. If for any reason you do not qualify today, we will come up with a customized financial plan to help you and your family stay on track to qualify as soon as possible. Obtaining a mortgage loan can be difficult. Even if you have had credit issues in the past, we encourage you to try us at Gustan Cho Associates today.

Gustan Cho Associates is able to lend without any lender overlays on government and conventional loans. Many lenders have added additional overlays due to the COVID-19 coronavirus outbreak; the good news is we have not. We offer all conventional, FHA, VA, and USDA mortgages without any LENDER OVERLAYS. We also have a full slate of NON-QM mortgage products. Gustan Cho Associates has dozens of non-QM loan programs. If you are in the market for a jumbo mortgage, you have also come to the right spot. We have numerous different jumbo mortgage options available.

Qualifying For A Mortgage With A Company With No Lender Overlays

Gustan Cho Associates are mortgage experts. We are available seven days a week for any mortgage-related questions. Many mortgage loan officers are not up-to-date with the guideline changes. This can cause a headache down the road. It is important to select a mortgage team that will get you to the finish line. Our mortgage professionals are available to help seven days a week and we look forward to hearing from you and your family. To answer any questions, you could also email Mike Gracz at mgracz@gustancho.com. You can call or text Mike at 630-659-7644 anytime.