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Mortgage Tips for Realtors
Mortgage Tip #1 - Stove
or No Stove
Many Realtors are under the impression that a
home must have a stove installed in order to obtain FHA financing.
This is NOT an FHA requirement. However, many lenders DO require a
stove. Be sure to check with your Loan Officer before it becomes an
issue an holds up your closing.
Mortgage Tip #2 - Unpermitted
Additions
There was a time when an unpermitted addition
was not a problem to finance. But now, I know of only 2 Lenders who
will even consider lending on a home with an unpermitted addition.
Be sure to let your Loan Officer know right away if you are selling a home
with an unpermitted addition so the loan can be structured correctly from
the start.
Mortgage Tip #3 - Pools
or Spas
All pools and spas must be filled with clear
water in order to obtain FHA, VA and Conventional financing. If the
appraisal inspection is completed prior to the pool and spa being filled,
the Lender will require a final inspection prior to closing, resulting in
a reinspection fee.
Mortgage Tip #4 - Security Bars
Building Code requires that every bedroom has
at least two exits. If the bedroom window with security bars is the
second exit, then the security bars must be equipped with a quick release
in order to obtain FHA, VA and Conventional financing. Security bars
with a keyed lock is not acceptable.
Mortgage Tip #5 - Utilities
Turned On
All utilities must be turned on inside the house at the time of the
appraisal inspection. Appraisers are NOT allowed to turn them on at
the meter. If the utilities are not on at the time of the
inspection, the appraisal will be made "subject to" them being
on, and a final inspection will be required prior to closing. This
is especially important with vacant and bank owned properties.
Mortgage Tip #6 - Exit Doors
Building Code requires that exit doors be operational from the inside
without a key. Therefore, keyed locks will need to be replaced with
turn locks prior to closing in order to obtain FHA and VA financing.
The underwriter may also call for keyed locks to be replaced for
Conventional financing as well.
Mortgage Tip #7 - Wires and Switches
In order to obtain FHA or VA financing, any exposed electrical wires
must be capped or covered, and all switches and outlets must have cover
plates. The appraiser will most likely indicate these issues on the
appraisal. It is possible that your Conventional underwriter may ask
for the corrections as well.
Mortgage Tip #8 - Chipping/Peeling Paint
For FHA financing, peeling and chipping paint is an issue with homes
built prior to 1978. The appraiser will note the chipping and
peeling paint, however, the Lender should not require it to be corrected
on new homes, only those homes built prior to 1978 when lead-based paint
was available.
Mortgage Tip #9 - Termite Reports
FHA and Conventional financing does not require a termite report unless
the appraiser notes visible signs of termites during the appraisal
inspection. VA always requires a clear termite report signed
by the buyer at closing.
Suburban Mortgage's policy is: If the termite inspection charge
is on the HUD, we will require a clear termite report prior to
funding. (Some termite companies may give your buyer a discount if
paid at the time of the inspection.)
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Suburban Mortgage, Inc.
An Equal Housing Lender BK #010123 Lic. #206048