Embarking on the journey of purchasing a home in the Badger State is an adventure filled with anticipation and, often, a measure of uncertainty. Central to this process is the pivotal step of a Wisconsin home inspection—an essential safeguard that delves beneath the property’s surface, ensuring that your future haven is as sound in structure as it is inviting in appearance. This Redfin article will explore the ins and outs of Wisconsin home inspections, covering everything from their importance to specialized inspections, requirements, and costs. So whether you’re buying a home in Madison or a home in Green Bay, keep reading to learn everything you need to know about getting a home inspection in Wisconsin.
Why should you get a home inspection in Wisconsin?
Buying a home is a big investment, and getting a home inspection is a crucial step in protecting that investment. A professional home inspector will thoroughly assess the property, identifying any hidden issues, structural concerns, electrical and plumbing problems, and other potential red flags that may be missed during a casual walkthrough. This complete examination provides you with valuable insights, negotiation leverage, and peace of mind, ensuring you make an informed and confident decision about your new home.
“In Wisconsin, a home inspection is a smart step for buyers and sellers alike,” says Patrik Neuwirth of Inspect Karma, a Milwaukee-based home inspector. “It serves as a critical safeguard, uncovering potential issues from seasonal wear due to the state’s harsh winters and humid summers, to more hidden and costly problems. An inspection provides transparency and confidence, ensuring that one of life’s biggest investments is sound and secure.”
Are there any specialized inspections that Wisconsin buyers should consider?
While a standard home inspection covers the fundamentals, Wisconsin buyers should be aware of specialized inspections tailored to specific concerns. These include radon testing, especially in areas with elevated radon levels, mold inspections for properties prone to mold growth, lead paint assessments in older homes, and well and septic inspections in rural areas with these systems. These specialized inspections are key for ensuring your home is safe and free from potential hazards.
1st Choice Inspection in Milwaukee emphasizes the importance of sewer drain scoping, especially for houses built before the 1970s because tree roots can cause issues.
Are home inspections required in Wisconsin?
In Wisconsin, home inspections are not mandatory, but they come highly recommended for all homebuyers. While not required by law, certain lenders may impose inspection requirements as part of the mortgage approval process, such as pest inspections or appraisals. It’s important to note that despite the lack of mandatory inspections, opting for a home inspection is a wise and cost-effective choice.
Donn Anderson of Anderson Home Inspections advises that although inspections aren’t required in the state, they are more than worth the cost. It’s not uncommon for homebuyers to incur thousands of dollars in surprise expenses because they decided against getting a home inspection.
How much does a home inspection cost in Wisconsin?
The cost of a home inspection in Wisconsin can vary based on several factors, including the property’s size, age, location, and the scope of the inspection. On average, you can expect to pay between $300 and $500, with specialized inspections incurring additional expenses. While it may seem like just another added cost, the investment is well worth the peace of mind and potential long-term savings it provides.
Can you sell a house in Wisconsin without an inspection?
Wisconsin does not require sellers to conduct a pre-listing inspection, but many opt for this proactive approach. A pre-listing inspection can help find and address issues upfront, making the selling process smoother and more attractive to potential buyers. While not mandatory, it’s a strategic move for sellers looking to increase their home’s market appeal.
Wisconsin home inspection: the bottom line
In the world of real estate, knowledge is power. A home inspection in Wisconsin is your key to making an informed decision when purchasing a property. It provides you with insights into the home’s condition, negotiation power, and peace of mind, ensuring that you are investing in a safe and sound property. Regardless of where in the state you’re looking to move, a home inspection is a wise investment in your future.
Real estate across the country has certainly been crazy over the past three years, but the housing market in Ohio still looks pretty sane. This isn’t California or Massachusetts, and that’s a good thing for house-hunters: Homes in the Buckeye State are significantly more affordable than in many other states around the country, and prices here tend to be far below national levels. Read on for everything you need to know about the cost to buy a house in Ohio.
How much does it cost to buy a house in Ohio?
The average price of a home in Ohio was $275,461 as of September 2023, according to statistics from Ohio Realtors. That’s quite a bit lower than the nationwide median price for the same month, which was $394,300.
Depending on where you’re hoping to call home in the state, though, your budget may look a bit different. Consider the average sale prices in some of the most popular cities: In Cincinnati, the average was $319,310; in Columbus, $348,569; and in Dayton, $261,583.
Outside the bigger cities, you’ll find a smaller price point. For example, the average sale price was around $203,000 in Ashland and Athens, and less than $200,000 in both Mansfield and Lancaster.
It’s helpful to focus on how a home’s price tag will translate into your monthly payments as its owner, especially with today’s high mortgage rates. Consider the monthly obligation on a $275,000 home, assuming a 20 percent down payment on a 30-year mortgage with a 7.5 percent interest rate: According to Bankrate’s mortgage calculator, that scenario would result in principal and interest payments of $1,538 a month (not including the additional costs of property taxes and homeowners insurance).
Down payment
How much money have you saved for a down payment? This upfront cost is crucial, because the more you are able to pay upfront, the less you have to borrow.
You don’t have to put down 20 percent, necessarily, although that is the magic number to avoid paying an extra monthly premium for private mortgage insurance. Here are the minimum down payment requirements for some of the most popular types of home financing (if you qualify):
Conventional loans: 3 percent
FHA loans:5 percent with a credit score of at least 580, or 10 percent with a credit score between 500 and 579
VA loans: No down payment required for qualifying military service members or veterans
USDA loans: No down payment required if you buy a rural property that meets specific criteria
One piece of good news for first-time buyers: Ohio has some generous first-time homebuyer programs that can help you cover your down payment and closing costs. You’ll need to meet certain qualifications for credit score, income and purchase price to be eligible.
Closing costs
According to data from Core Logic’s ClosingCorp, closing costs in Ohio add on another 2 percent of the purchase price — approximately $5,500 on an average-priced $275,461 Ohio home. That amount isn’t all coming out of your pocket, though. Closing costs are split between buyers and sellers.
Costs that are the buyer’s responsibility will include a variety of fees charged by your lender for things like a credit check and loan origination, as well as a required appraisal of the home’s value. You’ll also want to get a home inspection to verify the home’s condition. Lenders typically like to see a cushion that will keep you protected in the event of an emergency, too, so make sure you set aside some extra cash in reserve.
Cost to move
Don’t forget about the additional expense of moving all your stuff to your new Ohio home. According to HomeAdvisor, the average cost of a local move is just over $1,700. If you’re moving long-distance to get to Ohio, though, you’ll need to set aside a lot more money. A cross-country move has an average price tag of $4,617.
Homeownership costs
Once you buy a house in Ohio, you’ll need to be prepared to pay for its upkeep. While there’s no crystal ball for home maintenance costs, State Farm advises homeowners to budget between 1 and 4 percent of their home’s value for annual upkeep. On an average-priced Ohio home, that means you should plan to set aside up to $11,018 each year for upkeep.
You’ll also need to plan for property tax costs. In Ohio, the typical homeowner paid $3,235 to the government in property taxes in 2022. And don’t forget to budget for your homeowners insurance coverage, too, as well as HOA fees if your new home is part of a homeowners association.
Reducing the costs to buy a house in Ohio
Buying a house can seem overwhelmingly challenging, especially with today’s high mortgage rates. Consider these options to reduce your costs:
Ask for seller concessions: Across the country, more sellers are agreeing to cover a portion of the buyer’s closing costs, according to a report by Redfin. Don’t hesitate to ask a seller if they’re willing to help out with some of your costs. They don’t have to say yes, but they also don’t want to see you walk away from the deal.
Cast a wide net: If you have a flexible work arrangement that doesn’t require you to be in one specific location, look at cheaper locations beyond where your job is based. And if you don’t need a huge amount of space, a condo or townhouse is a great way to achieve homeownership for a lower price than a single-family home.
Hold out for longer: It’s OK to press pause if you think now just isn’t the right time. Mortgage rates are the highest they have been in more than two decades. There’s no guarantee they’ll come down, but taking some time to build your savings and your credit score while you wait might not be a bad idea.
Next steps
While Ohio’s home prices are certainly more appealing than many other parts of the country, buying a house here is not necessarily easy. For example, Redfin data shows that the typical home in Columbus gets four offers, which shows that the Buckeye housing market can feel just as competitive as Big Ten football. With that in mind, make sure you have an experienced local real estate agent on your team.
FAQs
As of September 2023, the average sale price for a home in Ohio was $275,461, according to data from Ohio Realtors.
No, they are increasing. Between September 2022 and September 2023, the average sales price in the Buckeye State rose 5.9 percent, according to Ohio Realtors data.
Yes — buyers pay some portion of closing costs in every state, including Ohio. These typically include an array of fees charged by the mortgage lender, among others.
If you’re getting ready to buy your first home, there are probably thousands of questions running through your mind. Questions about location, real estate services, expenses, and more — it’s a huge financial commitment and you probably want to make sure you have the best chance at getting exactly what you want. While it can be a difficult process to navigate, there is help for first-time homebuyers, from resources and advice to first-time homebuyer programs to help you finance a home.
If you’re worried you won’t ever be able to purchase a home, take a deep breath and a good look at your finances. You can start by reviewing your current financial situation and beginning to save for a down payment. (There are investment accounts and savings options that can help you reach your goal of buying a home, too.) Here are 12 helpful tips for first-time homebuyers.
1. Know Your Credit Score
Your credit score is typically very influential in determining what kind of interest rate you can get on a home mortgage loan. You can get one free credit report from each of the three major credit bureaus (Equifax®, Experian®, and TransUnion®) every 12 months, and may also be able to view free reports more frequently online. You can review your credit report to spotlight any errors that may affect what lenders are willing to offer you.
If you find any errors, you can report them and have them removed. This process can sometimes take a while, even if the mistakes are obvious, so consider starting a credit report review early on in your home-buying process.
2. Calculate What You Can Afford
Do you know how to figure out how much house you can afford? While the size of your mortgage is generally determined by an evaluation of your personal finances and debt, there are a few rules of thumb that may be relevant.
One general guideline is that your housing costs, including your mortgage payment, should, ideally, be no more than 28% of your gross monthly income.
If you are paying off student loans, credit card debt, or have a car payment, you may want to adjust your budget accordingly. Some people try to keep their debt to 36% of their gross monthly income, so that they can still prioritize financial goals like saving for retirement. (This is just another rule of thumb and everyone’s financial goals are different.)
And having less debt may make you more appealing to mortgage lenders. Understanding how much money you feel comfortable spending on a house can, in turn, impact the properties you consider. As you build your budget, you can also check out SoFi’s mortgage calculator.
3. Look into First-Time Homebuyers’ Programs
While you are evaluating your options and creating your budget, it could be worth looking into some first-time homebuyers’ programs. Some programs offer down payment and closing cost assistance, or loans with reduced interest rates.
There are a variety of options available for first-time homebuyers looking for assistance. For example, the Federal Housing Administration offers a mortgage insured by the FHA. These loans often come with competitive interest rates and allow for smaller down payments.
The USDA also helps first-time homebuyers with a program focused in rural areas. And the VA loan program provides assistance to active duty military members, veterans, and surviving spouses. There are even more first-time homebuyer programs and loans available from various states as well.
4. Understand the Expenses
There are plenty of other expenses that come with purchasing a home beyond your down payment and closing costs. For example, when you’re renting property, you don’t have to worry about property tax or general maintenance. When you own property, you do.
In addition to property tax, you’ll likely also need insurance to protect your new home. And you’ll be responsible for maintaining the property, of course, which can include painting, replacing windows, updating the roof, replacing appliances, and more regular maintenance and upkeep.
You may also need to factor in additional purchases like a lawn mower or professional landscaping if the property you are looking at has a yard. Will you need to buy a snowblower to clear the driveway during long winters? These are all factors that can come into consideration when figuring out the cost of your new home.
Check out our Home Affordability Calculator to estimate how much house you can afford.
💡 Quick Tip: Jumbo mortgage loans are the answer for borrowers who need to borrow more than the conforming loan limit values set by the Federal Housing Finance Agency ($726,200 in most places, or $1,089,300 in many high-cost areas). If you have your eye on a pricier property, a jumbo loan could be a good solution.
5. Remember that Location Matters
Location is, obviously, important to many buyers. In some cases, you may have to decide if being in the neighborhood you want is more important than having extra square footage or other, similar trade-offs.
If you have kids or are planning to, you will likely be considering the school district each potential property falls in. Even if you aren’t planning to have kids, it could be worth considering the school district since it can have an impact on the value of your property and could make it easier to sell the house down the line.
6. Plan for the Future
Zoning laws and development plans are another factor to consider when house-hunting. If there is undeveloped land nearby, it can’t hurt to do some digging and see if there are any plans for development.
It may also be worth looking into the property value of other homes in the area. Have they been declining in recent years? If so, this could impact the future value of a home you’re considering.
7. Use Your Imagination
When shopping around for houses, you can take the opportunity to look at a property’s potential, as well as its current value. It’s easy to be distracted by the current owner’s décor, paint, carpet, or other factors that are easy to change. You can easily repaint or update the appliances, but you won’t be able to adjust the location, floorplan, or add rooms to the home as easily. 💡 Quick Tip: Backed by the Federal Housing Administration (FHA), FHA loans provide those with a fair credit score the opportunity to buy a home. They’re a great option for first-time homebuyers.
8. Reserve Cash for Home Improvements
When you’re getting ready to put a down payment on a house, it may be tempting to clean out your savings account. And while that’s completely understandable, keeping your emergency fund close at hand may be a good idea when becoming a homeowner.
After closing costs have been sorted out and you’ve moved into your new home, you might find that unexpected repairs pop up. Having a reserve stash of cash can be helpful if the roof in your new home starts leaking, or you need to replace an appliance.
9. Get a Real Estate Agent
With all of the housing apps and free resources available on the internet, it may seem like a real estate agent is unnecessary. But in reality, navigating the housing market can be tricky and hiring an agent up front can save you time and help make your home-buying experience easier.
While you could spend your time going to open houses and scouring real estate listings, an agent can tailor the home search so that you spend less time looking at houses that don’t meet your criteria. They also can have access to new listings that aren’t yet on the market and may be willing to “preview” homes for you. A real estate agent can also help you navigate the intricacies of contract negotiations and paperwork. If you’re wondering how the real estate agent gets paid take heart: They are typically paid from the seller’s proceeds.
10. Know What to Expect from a Home Inspection
Having a home inspection completed is a critical step in buying a home. Inspection procedures vary from state to state, so it can be important to understand what is included in the home inspection in your state, since this is a great chance to truly examine the property and uncover any issues—before they become your issues.
Inspectors should have access to every part of the house including the roof and crawl spaces, and you should be able to attend the inspection yourself.
Don’t be afraid to ask the inspector questions; the more information you have, the better prepared you can be to decide if this is the right house for you.
11. Negotiate the Offer
You’ll have an opportunity to negotiate when you’re making an offer on a house. A lot of factors can influence an offer and negotiating terms in your favor could result in serious savings, especially if you are in a buyer’s market.
If you are working with a real estate agent, they can help give you a good idea of what is considered a reasonable purchase bid by providing comparable sales. A “comparable” is a home similar to the one you are considering (and in the same condition and location) that has sold in the last three months. An agent can help give you an estimated price range and manage your expectations.
12. Find the Right Mortgage
Before committing to a mortgage, it’s smart to shop around and see what various lenders are willing to offer you. A few things to consider include the interest rates, loan terms, application process (Is it lengthy? Online only?), and any hidden fees included in applying for or repaying the mortgage. Familiarize yourself with the different types of mortgage loans available during this shopping process.
Looking for an affordable option for a home mortgage loan? SoFi can help: We offer low down payments (as little as 3% – 5%*) with our competitive and flexible home mortgage loans. Plus, applying is extra convenient: It’s online, with access to one-on-one help.
SoFi Mortgages: simple, smart, and so affordable.
Photo credit: iStock/PeopleImages
*SoFi requires Private Mortgage Insurance (PMI) for conforming home loans with a loan-to-value (LTV) ratio greater than 80%. As little as 3% down payments are for qualifying first-time homebuyers only. 5% minimum applies to other borrowers. Other loan types may require different fees or insurance (e.g., VA funding fee, FHA Mortgage Insurance Premiums, etc.). Loan requirements may vary depending on your down payment amount, and minimum down payment varies by loan type.
¹FHA loans are subject to unique terms and conditions established by FHA and SoFi. Ask your SoFi loan officer for details about eligibility, documentation, and other requirements. FHA loans require an Upfront Mortgage Insurance Premium (UFMIP), which may be financed or paid at closing, in addition to monthly Mortgage Insurance Premiums (MIP). Maximum loan amounts vary by county. The minimum FHA mortgage down payment is 3.5% for those who qualify financially for a primary purchase. SoFi is not affiliated with any government agency.
Shopping for a mortgage has never been easier, thanks to the array of online options. Brick and mortar lenders may still be a viable option, but you may find that an online lender has even more to offer.
Furthermore, exploring online mortgage lenders allows you to compare mortgage rates. You can also receive customized mortgage loan offers in your inbox in minutes. Even better, you’ll have direct access to a loan officer in case you have questions.
Who are the top online mortgage lenders for 2023?
If you’re in the market for a new home and ready to start your search for online lenders, here are some reputable options to choose from.
Best Online Mortgage Lenders of 2023
loanDepot
loanDepot is an online lender, but don’t think that means they are lacking in customer service. They provide over 150 loan stores across the country for customers that prefer in-person service.
The lender is a suitable option for anyone who wants to take out a mortgage with the assistance of a loan officer.
loanDepot offers various mortgage products, including fixed and adjustable-rate mortgages. You can also apply for jumbo loans, VA loans, and FHA loans. You’ll need a minimum credit score of 620 to qualify for a mortgage.
loanDepot ranks high in customer satisfaction and most buyers seem to have a good experience working with them. However, they do charge higher fees than other mortgage lenders.
Quicken Loans
This online lender takes the hassle out of securing a mortgage by letting you complete the entire process online.
You’ll need to provide a few key details about your finances using this form to get started. A Home Loan Expert will review your application and contact you to discuss loan options.
And no need to worry about getting overwhelmed. Quicken Loans offers online tools to help you understand loan options and the home buying process. Plus, the customer service is excellent; a live representative is always standing by.
You can also upload all your documents and monitor the status of your application directly from the portal. This means you never have to pick up the phone if you don’t want to.
And when you’re ready to close, you have the option to schedule the closing when it’s convenient for you.
Better.com
If you’re looking for an online mortgage lender, you should check out Better.com. The company uses technology to simplify the lending process for its customers. Better.com promises a fast and transparent mortgage experience.
The lender is willing to work with all different kinds of buyers, including individuals who are self-employed or have unique job situations.
At least a third of its mortgages are taken out by first-time homebuyers, and over 70% of all buyers pay a down payment that is less than 20%.
Better.com mortgages don’t come with any hidden fees; there are no application or origination fees. To get started, you can visit the company’s website and get pre-approved in just a few minutes.
Rocket Mortgage by Quicken Loans
Rocket Mortgage is a division of Quicken Loans. Their key competitive advantage is the asset importer tool, which takes the guesswork out of determining whether you’re approved.
Instead of uploading documents, importing them from the information provider guarantees the accuracy of the numbers and allows you to receive loan offers using real-time interest rates in a matter of minutes.
And once you’ve selected a loan that works for you or created a custom option, you’ll be able to close in record time. Plus, Rocket Mortgage customer service experts are standing by to assist with questions you may have every step of the way.
NBKC Bank
NBKC Bank is not as widely known as many of the other lenders on this list. But that doesn’t mean you should rule them out as a potential mortgage lender.
There are several features that make the Kansas City-based lender a great option. The bank promises fast home closings and provides exceptional customer service.
NBKC Bank focuses mostly on online mortgages and offers its customers competitive interest rates. It does have several brick-and-mortar locations but focuses mostly on processing online mortgages.
You’ll need a minimum credit score of 620 to qualify for a mortgage, so this is a suitable option for borrowers with fair credit. NBKC Bank offers various mortgage products, as well as personal accounts. This makes them a great option for anyone looking for a full-service lender.
Guaranteed Rate
You can apply for a mortgage in a matter of minutes from the homepage of this digital mortgage provider’s site.
All you have to do is answer a few questions about your desired home, credit, and finances to receive a comprehensive listing of loan types and interest rates you may qualify for.
Guaranteed Rate has plenty of no-down-payment loan options like VA loans and USDA loans. They also offer a knowledge center to help you understand mortgages and how the process works.
Once you decide on a mortgage product that best suits your needs, you’ll work directly with a loan expert to upload and sign documents and finalize the loan. If you prefer to meet with a loan expert, there are 170 Guaranteed Rate branches across the United States.
Truist
Truist is known for its brick-and-mortar presence, but they also have an impressive online mortgage platform. Available in English and Spanish, Truist mortgage offers an array of mortgage solutions to choose from.
You can initiate the application process online or directly from your mobile device through the SMARTGUIDE tool.
You can also call 877-907-1020 to speak with a loan officer or chat online from the website. Or if you wish to meet with a loan officer, use the locator tool to find a Truist branch near you.
You can also take advantage of their Doctor Loan program if you’re a medical professional and meet select income criteria.
SoFi Mortgage
SoFi mortgage is another online lender that stands out from the masses. Although they don’t offer government-backed home loans, SoFi mortgage has programs that require a down payment as low as 10 percent, and they do not assess mortgage insurance.
Customers also enjoy a seamless prequalification and application process, along with no origination fees. Even better, it may be possible to close on your loan in under 30 days.
Penny Mac
If you’re searching for flexibility, Penny Mac may be the ideal lender for you. They offer several options to consumers of varying financial backgrounds. To date, they’ve served over 1 million customers and funded over $5 billion in loans in 2017, alone.
You can request a no-obligation free quote online, chat with an expert, or call (888)870-6229 to get started.
Reali
Crediful’s rating
Reali caters to consumers looking to purchase or refinance their homes. Through their Interactive Loan Dashboard, you can apply, upload any documents needed, and track your loan’s progress at the tap of a fingertip.
You’ll also have access to a Home Loan Advisor 24/7 to address any concerns you may have. And because of their streamlined process and low fees, you can expect to close in record time without spending a fortune.
Unfortunately, Reali does not offer government-backed products, like FHA loans, USDA loans, and VA loans.
This can be a turnoff to first-time, credit-challenged, or cash-strapped buyers.
Another major drawback is that they only operate in Arizona, California, Colorado, Florida, Georgia, Illinois, Michigan, Oregon, Pennsylvania, Texas, Virginia, and Washington.
The good news is they plan to expand their offerings to more states soon.
Pros and Cons of Online Mortgage Lenders
The rise of the internet has revolutionized many industries, and the mortgage industry is no exception. Online mortgage lenders have steadily been gaining a more substantial market share due to their distinct advantages. However, as with anything, they come with their own set of disadvantages. Here, we break down the pros and cons of opting for an online mortgage lender.
Pros of Online Mortgage Lenders
1. Lower Costs: Operating primarily online, these lenders often have fewer overhead costs compared to traditional brick and mortar lenders. This can translate into competitive mortgage rates and lower lender fees, making online mortgage lenders potentially cheaper.
2. Convenience: The ability to initiate and complete the entire application process online is a significant advantage. You don’t have to schedule meetings with a loan officer or travel to a bank branch. Instead, you can apply anytime, anywhere, which fits well with busy schedules and modern, on-the-go lifestyles.
3. Range of Loan Products: Online mortgage lenders often offer a broad range of loan products, including FHA and VA loans, USDA loans for rural properties, conventional loans, and jumbo mortgages. These lenders often cater to a diverse demographic, meaning whether you’re a first-time homebuyer seeking down payment assistance, a veteran, or someone with less-than-perfect credit, you can often find an online mortgage product that suits your needs.
Cons of Online Mortgage Lenders
1. Technological Hurdles: Not everyone is tech-savvy. If you’re not comfortable navigating online platforms or don’t have reliable internet access, you may find the online mortgage process daunting. The learning curve associated with digital platforms can be a deterrent for some people.
2. Lack of Personal Interaction: Some people prefer a high-touch, personalized service when dealing with significant transactions like buying a home. With online lenders, face-to-face interaction is usually minimal or non-existent, which can be a downside for those who prefer a more traditional approach to their financial transactions.
3. Negotiability of Fees: While online mortgage lenders are often cheaper, certain costs like origination fees and closing costs may not be as negotiable as they could be with a traditional lender. Also, mortgage insurance may still be required for government-backed loans, like FHA or VA loans, and the requirements for jumbo loans may be stricter.
4. Trustworthiness: The online space can be a breeding ground for scams and unscrupulous practices. Not all online mortgage lenders are trustworthy, making it crucial to do your homework. It’s important to research each online lender thoroughly, checking their reputation, reading customer reviews, and ensuring they are registered with appropriate financial oversight institutions.
Despite these potential downsides, many homebuyers find that the convenience, competitive rates, and the ability to shop around from multiple lenders offered by online mortgage lenders outweigh the cons. But the best online mortgage lender for you ultimately depends on your personal finance needs, comfort level with technology, and unique home loan situation.
Factors to Consider when Choosing an Online Mortgage Lender
Finding the right online mortgage lender for your home-buying journey involves more than just hunting for the lowest interest rate. You need to consider a variety of factors, from loan types to the speed of loan processing. Here’s a breakdown of what to look for:
Interest Rates
As a prospective borrower, interest rates are often one of your first considerations. The interest rate can significantly influence your monthly mortgage payment and the total cost of your loan. Due to their lower overhead costs, online mortgage lenders often advertise competitive rates. However, it’s essential to compare rates across different lenders to ensure you’re getting the best deal.
Fees and Hidden Charges
While interest rates play a crucial role in determining your loan cost, it’s equally important to consider fees and potential hidden charges. This could include origination fees, appraisal fees, closing costs, and other service charges. Some lenders may also charge additional fees for rate locks or early repayments. Always ask for a comprehensive cost breakdown and be wary of lenders who are not transparent about their charges.
Loan Types
Each online mortgage lender may offer a variety of loan types, such as FHA loans, VA loans, conventional loans, and more. Depending on your personal circumstances and needs, you might need specific loan products like USDA loans for rural properties, FHA or VA loans for a low down payment, or jumbo loans for larger properties. Ensure that the lender you choose caters to the type of loan that suits your situation best.
Customer Service and Support
Excellent customer service is crucial when dealing with online lenders as your primary communication methods will be via phone, email, or online chats. Lenders who offer high-quality customer service can significantly streamline the mortgage process, making it less stressful for you. Consider checking customer reviews and ratings for insights into a lender’s customer support.
Speed of Loan Processing
The time it takes for online mortgage lenders to process your loan application and close your loan can vary. If you’re working within a specific timeframe, you may prefer a lender known for quick processing. This is particularly crucial in competitive real estate markets, where being able to close swiftly could make all the difference.
Pre-approval Process
A seamless pre-approval process can signify an efficient online mortgage lender. Pre-approval offers you a rough estimate of how much you can borrow and helps you stand out in competitive property markets. Seek lenders that provide easy pre-approvals, preferably with only a soft credit check to avoid impacting your credit score.
User-friendly Technology
With most of your interaction with online lenders taking place digitally, user-friendly technology becomes paramount. Consider factors such as the simplicity of the application process, online document upload functionality, digital signature capabilities, and the ease of online loan tracking. A lender with a robust, intuitive platform can significantly simplify your online mortgage process.
Tips for Applying for a Mortgage Online
Embarking on the journey of applying for a mortgage online can feel overwhelming, especially if it’s your first time. But don’t worry – we’ve got some helpful tips to guide you through the process.
How to Prepare
Before you start your online mortgage application, it’s important to get your financial house in order. Here’s how:
Check your credit score: Your credit score is one of the main factors that lenders consider when evaluating your loan application. Make sure to check your credit reports for any errors and dispute them if needed. If your score is low, you might want to consider improving it before applying for a mortgage.
Verify your income: You will need to provide proof of income, so gather your recent pay stubs, W-2s, or tax returns. If you’re self-employed, you may need to provide additional documentation, like bank statements or profit and loss statements.
Get your documents in order: Apart from income verification, you’ll need other documentation, like identification, proof of assets, and information about your debts. Having these documents ready can speed up the application process.
Navigating the Application Process
Once you’re ready to apply, keep the following in mind:
Understand the terms: Make sure you understand the terms of the mortgage, like the interest rate, whether it’s fixed or adjustable, the length of the loan, and any fees involved.
Use online tools: Many online lenders offer useful tools like mortgage calculators. These can help you understand what your monthly payments might be based on different interest rates and down payment amounts.
Stay organized: Keep track of where you are in the application process. Most online platforms will save your progress, but it’s good to have your own record too.
Questions to Ask Your Lender
Securing a mortgage can often feel like a daunting process, particularly when applying online. To navigate this path with more confidence, it’s crucial to arm yourself with the right questions when engaging with potential lenders. The responses to these questions will not only give you a clearer idea about the mortgage terms but also about the lender’s transparency and commitment to customer service.
What types of loans do you offer?
The world of mortgages encompasses a variety of loan types designed to cater to different borrower needs. This includes conventional loans, government-backed loans such as FHA, VA, and USDA loans, and jumbo loans for larger mortgages.
Understanding the unique benefits and requirements of each type is important. For example, FHA loans may be suitable for those with lower credit scores, while VA loans are primarily designed for veterans. Your potential lender should be able to provide a comprehensive explanation of each option and help guide you towards the loan type that best fits your unique situation.
What are the interest rates and APR?
While the interest rate of a loan often takes center stage, the Annual Percentage Rate (APR) should not be overlooked. The APR provides a more comprehensive measure of cost as it includes the interest rate, lender fees, and other loan charges, offering a more complete picture of the long-term cost of the loan.
What fees are involved?
Beyond the interest rate, mortgages often involve several other fees that can impact the overall cost of the loan. These include origination fees, appraisal fees, home inspection fees, and potentially prepayment penalties. Some lenders may even charge for rate locks, which secure your interest rate for a specified period. It’s critical to ask for a detailed breakdown of all fees involved to ensure that there are no hidden costs that might surprise you down the line.
What Is the estimated timeline for approval and closing?
Mortgage approval and closing timelines can vary greatly among different lenders. Knowing the expected timeline can be crucial, especially if you’re working with a specific move-in date. In a competitive real estate market, a quick approval and closing process could make all the difference when multiple offers are being considered.
What are your minimum credit score and down payment requirements?
Understanding a lender’s minimum credit score and down payment requirements can help you gauge your chances of approval. These requirements can vary greatly depending on the loan type and the individual lender’s policies.
Do you consider alternative credit data?
For those with a limited credit history, some lenders may consider alternative credit data such as utility bill payments or rent payment history. Asking about these possibilities could potentially help you qualify for a loan even with less conventional credit information.
What is your process for loan servicing?
Understanding whether the lender will service your loan or if they intend to sell it to another company is important. If they plan to sell it, knowing who your point of contact would be for any issues or inquiries is crucial.
Bottom Line
Choosing an online mortgage lender is a significant decision that can impact your financial situation for years to come. Therefore, it’s critical to take the time to carefully evaluate each lender. From comparing interest rates to analyzing the type of customer service they offer, there are many factors to consider in this selection process.
We’ve touched upon some of the best online mortgage lenders available today. These lenders were chosen based on their competitive rates, comprehensive loan options, excellent customer service, and user-friendly platforms. However, remember that the “best” lender will vary depending on individual circumstances, and the top choices for others might not be the best for you.
While online mortgage lenders offer convenience and often competitive rates, they also come with their unique set of challenges. It’s vital to remember that transparency, trustworthiness, and a clear understanding of the terms and conditions are paramount in any financial decision, including choosing a mortgage lender.
We encourage you to conduct your own research and take advantage of online tools and resources that many of these lenders offer. Shopping around and comparing multiple lenders will help you find the best mortgage fit for your specific needs.
Remember, a mortgage is a long-term commitment. The time and effort spent in making a careful, well-researched decision now will pay dividends over the life of your loan. Happy home hunting!
Buying a home is an exciting—and typically very expensive—venture. Understanding the mortgage process, your financial status, and what you really want and need in a home are all important to ensuring a desirable outcome when you begin your home search. But what you might not realize is that when you do find the home that ticks most of the boxes, you don’t necessarily have to pay what the seller is asking. Learn more about negotiating house prices below.
Tips for Negotiating House Price
Can You Offer Less Than Asking Price on a House?
It may feel odd to haggle over house price, but you can offer less than what the seller is asking for a home. That’s why it’s called making an offer. The seller doesn’t have to accept the offer, though, and you might find yourself entering into negotiations if you do want the home. During this process, it’s important to balance your desire for the home with a practical approach to how much you should, can, or even want to spend on it.
Tips for Negotiating House Prices
Knowing how to negotiate house price is important because it helps you get a better deal. But you aren’t the only one that might be making an offer, so you also want to follow some best practices so your dream home doesn’t get scooped up by someone else while you’re hedging your bets with the seller.
1. Partner with a real estate agent who can help.
You might start by entering the homebuying process with a bit of help. A qualified real estate agent can serve as your partner as you look for homes and make offers. Here are some of the services a real estate agent can do for you:
Help you drill down to what you really want in a home
Offer greater understanding of the local real estate market
Find homes that meet your criteria that you might not know were for sale or be able to find otherwise
Arrange showings
Act as your go-between and advisor during negotiations with sellers
It’s important to note that not all real estate agents have negotiation experience or even offer this service in an aggressive manner. As a buyer hiring an agent, make sure you look for one with experience writing real estate contracts and negotiating on behalf of clients.
2. Understand how motivated the seller is.
Try to gauge how motivated a seller is to determine where you can start your negotiation. For example, a seller that must sell one home before buying another may be motivated to sell at anything but a loss. But one that doesn’t have to sell the home or is listing a property just to see if it might sell isn’t that motivated and may be able to reject any offer under asking price.
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A good real estate agent can also help you understand seller motivation. Here’s some information that can help you gauge it:
How long the house has been on the market. In general, the longer a home is on the market, the likelier a seller is to accept a lower offer.
How many offers have been made. If the seller hasn’t had any offers over a period of time, they may be more willing to consider yours. If they’ve declined many offers, it could be a sign they aren’t super motivated.
Whether the seller is on a deadline. If the seller has to move or needs to sell the home in a short time period for any other reason, it may put you in a good position as a buyer.
The home has been foreclosed on, which means the lender may be motivated to sell it to recoup whatever it can.
3. Be realistic with your offer.
Whatever state the markets and the seller are in, make sure you’re realistic when you make an offer. First, that means being realistic about what you can pay every month and whether you can get approved for a mortgage for the offer amount.
Getting pre-approved for a mortgage before you start negotiating can be a good idea. This process lets you know around what amount you’re likely to be approved for, how much down payment you might need, and whether you can get an interest rate that works for you. It also demonstrates to sellers that you’re a serious buyer and that you are likely to be able to obtain funding if your offer is accepted. That can make a difference in negotiations.
On the flip side, you should also be realistic about what the seller is likely to accept as an offer. Lowball offers can be seen as insulting and don’t set you on a good foundation for future negotiations.
What is considered a lowball offer? That varies, and your real estate agent can help you determine an appropriate offer in each case.
4. Show enthusiasm but don’t be too tied to the property.
The art of negotiation involves keeping a straight face, right? Actually, in the homebuying process, it might benefit you to demonstrate that you do really like the home in question. After all, the seller may have called this property home for a number of years and be personally attached to it. Selling it to someone else who will genuinely love and care for it could be important.
If it comes down to two similar offers from separate buyers and you’re the one who was delighted with the home and the seller saw you connect with the property, the odds might balance out in your favor. Just don’t overdo it and ensure that you’re making logical choices about financial matters no matter how much you love a house.
5. Put a deadline on the offer.
Finally, put a deadline on your offer. That helps reduce the chances that competing offers might come in and pushes the seller to make a decision or counteroffer so you can move on with the negotiation or your hunt for a different home.
What Else Can You Negotiate with Home Sellers?
If the seller’s firm on the price, you might be able to negotiate other things. Here are some tactics to consider:
Ask the seller to pay some or all of the closing costs.
Use the home inspection to point out items of concern and ask the seller to make repairs to the home in exchange for you paying the full asking price.
Agree to make certain repairs yourself, but ask the seller to agree to a cash payout at closing. This means they come to closing with a check for you to cover the costs of the repairs.
Get creative and ask the seller to leave certain appliances, such as a washer and dryer or refrigerator in the home.
Shop Mortgages Online
If you’re ready to buy your next home, you can start the mortgage process online. Follow these steps to get started.
Check your credit. You can sign up for ExtraCredit to see 28 FICO® Scores, including those commonly used by mortgage lenders.
Make sure your credit score is accurate by challenging inaccurate negative items, if necessary.
Continue to make strong financial decisions to help boost your score so you stand a better chance at getting approved for a mortgage.
Shop mortgage rates at Credit.com, get pre-approved or apply for a mortgage with one of our partner lenders.
Rent prices are on the rise, with the average cost increasing 18% between 2017 and 2022. But buying a home requires a hefty down payment and good credit. Renting to own your home can give you the best of both worlds, but there are some downsides.
If you’re thinking about signing a rent-to-own agreement, it’s important to weigh the pros/cons of rent-to-own home deals. Here’s what you need to know before you sign on the dotted line.
What are rent-to-own homes?
When you own a home, part of your monthly payments goes toward paying off the principal. If you stay in the home long enough, you’ll own it.
The same doesn’t apply to rentals. Your monthly rent solely covers your costs of living in that home, whether it’s a condo, apartment, townhouse, or single-family house.
A rent-to-own home lets you pay rent to live on the property, with the option to buy it when the lease runs out. In some cases, a portion of your rent goes toward the purchase price, but that isn’t always the case.
How does rent-to-own work?
A rent-to-own agreement is essentially a lease agreement with an option to buy. Rent-to-own contracts should be read thoroughly. Those options can vary from one contract to another.
When you sign a rent-to-own contract, you pay an upfront fee called an option fee. This is typically 1 to 5% of the home’s purchase price, and it’s non-refundable.
It’s important to note that a lease does not relieve you of the requirements to buy a house. You’ll still have to qualify for a mortgage and make a down payment. It’s merely a way to buy yourself some time and possibly put some of your rent toward the purchase price of a home.
Lease Option vs. Lease Purchase
Before you sign, pay close attention to the lease agreement you’re signing. There are two types, and one contractually obligates you to buy the property.
Lease Option Agreement
A lease option agreement is the best deal of the two for you, the buyer. You’re signing a lease option contract that merely gives you first rights to the house when the lease is up. If you change your mind, find a better deal, or can’t qualify for a mortgage, you can find somewhere else to live and move your belongings out.
Since the option fee is nonrefundable, it’s important to note that you will lose money if you choose not to buy. Calculate this loss when you’re deciding whether to buy.
Lease Purchase Agreement
Unlike a lease option agreement, lease purchase agreements obligate you to buy at the end of the lease. Since it’s a contract, that means you’re legally obligated to purchase the house.
This can be risky for a couple of reasons. Once you’re in the house, you may see issues you didn’t notice when you were first touring the house. Things could change with the neighborhood or your circumstances that you couldn’t know at the outset.
But the biggest issue with a lease purchase contract could simply be that you aren’t eligible for a mortgage to buy the house. Make sure you know, up front, what penalties or liabilities you’ll face if you can’t buy the house when your lease is up.
Even though both agreements operate differently on your end, they do obligate the seller to give you the option to buy when your lease expires. This puts you in a position to own a home at a predetermined future date, giving you the opportunity to start planning.
Length of a Rent-to-Own Agreement
Rent-to-own contracts start with a lease period that can be up to five years but is usually less than three. The thought is that the rental period will give a renter time to qualify for a mortgage. During this time, you’ll work on building your credit, if necessary, and saving for a down payment.
In some cases, a rent-to-own arrangement could have renewal terms. That means if you reach the end of the lease and want more time, you can extend the lease. With this option, though, the property owner could increase your monthly rent or the purchase price.
Preparing for Homebuying
During your lease term, you’ll make each monthly rent payment in exchange for remaining in the house. But it’s important during that time that you work toward purchasing the house when your time is up. Here are some things to do to boost your chances of landing a mortgage once your lease expires.
Boost Your Credit Score
Your rent-to-own deal requires that you qualify for a mortgage once the term is up. To do this, you will need to meet the minimum credit score requirements. You can get a free copy of your credit report each year at AnnualCreditReport.com, but there are also credit monitoring services that can help you stay on top of things.
Although requirements can vary from one lender to the next, Experian cites the following credit scores as necessary to land a mortgage:
FHA: If you qualify, a Federal Housing Association loan will accept credit scores as low as 500.
USDA loans: Those who meet the requirements can qualify with a score as low as 580.
Conventional loan: Generally 620 or higher, but some lenders require 660 at minimum.
VA loans: Eligible military community members and their families can obtain loans with scores as low as 620.
Jumbo loan: These loans cover houses at a higher price, so you’ll need a score of at least 700.
Save for a Down Payment
In addition to a good credit score, you’ll need to put some money down on your new home. Down payment requirements vary by loan type, but it’s recommended that you put at least 20% down. That means if you’re buying a $200,000 home, you’ll need at least $40,000 by closing.
There are lower down payment options, but if you choose those, your mortgage payments will include something called private mortgage insurance. This will increase your monthly payment by $30 to $70 per $100,000 borrowed.
If you can’t save up 20%, you may qualify for an FHA loan, which requires as little as 3.5% down. Both VA and USDA loans have zero down payment options, and there are programs offering down payment assistance to those who qualify.
The best part about rent-to-own properties, though, is that some come with rent credits. With a rent credit, a percentage of your rent will go toward your required down payment. Calculate in advance how much you’ll have in that escrow account at the end of your lease to make sure you save enough to supplement it.
What are the pros of rent-to-own?
Rent-to-own homes can be a great option, especially during a tight housing market. If there’s a house you want to buy, but you can’t make a down payment or your credit isn’t where it should be, it could be a great workaround. Here are some of the biggest benefits of rent-to-own agreements.
Rent May Go Toward Purchase Price
Depending on the terms of the rental agreement, renting to own could help you work toward paying for the home. Instead of the full amount of your rent being pocketed by a landlord, a percentage of your rent could go toward the eventual purchase price. Before signing, pay attention to rent credits and try to negotiate the best deal possible.
The Purchase Price Is Locked In
When a landlord agrees to a lease option, the home’s purchase price is written into the contract. That price will typically be higher than what the market says it’s currently worth. This means if the U.S. housing market sees an unexpected increase, you’ll be buying the home for less than its value. Even if the market dips, once you purchase the house and remain there for a few years, you may be able to sell it at a profit.
You’ll Buy Extra Time
For many renters, the rent-to-own period provides time to qualify for a mortgage. If you’ve researched all the options and found you’re close but not quite there yet, a rental period could be just what you need.
Before you choose this option, though, take a look at your circumstances. If substantial existing debt and poor credit mean you won’t qualify, you may need more than the few years you’ll get with a rent-to-own agreement.
No Moving Necessary
Let’s face it. Moving can be a pain. You have to pack everything up, line up a moving truck and get help moving, and unpack your items once you’re in the new location.
With a rent-to-own agreement in place, you skip the hassle of moving. You’ve already been in that home, making monthly rent payments, for at least a couple of years. You’ll simply go through the closing process and switch from rent payments to mortgage payments.
What are the cons of rent-to-own?
If you can get a mortgage, that’s always going to be a better option than renting or leasing to own. But there are some instances where renting without the buy option could be better for you. Here are some things to consider.
Rent-to-Own Home Maintenance
Before you sign any lease agreement, it’s important to read the fine print. One thing to note, specific to own agreements, is who will be responsible for maintenance during the rent-to-own period. If you rent without the promise of eventual ownership, your landlord will take care of those costs. In some cases, rent-to-own agreements require the renter to handle all repairs.
But there’s an upside to handling repairs on your own. To your landlord, the property is technically yours. That means you likely will give it more TLC. Still, it’s well worth it to pay for a home inspection before you agree to a rent-to-own agreement. This will identify any serious issues that will need to be addressed before you buy.
Option Fee
One distinguishing feature of a rent-to-own property is the option fee. This is usually between 1 and 5% of the purchase price and is non-refundable. That means if you don’t ultimately qualify for a mortgage, you’ll lose that money.
Home Values Could Drop
Property values aren’t guaranteed. Your landlord estimates the value of the property, but if you’re in a rising market, you might get that home at a steal. While that’s good news for you, the reverse can happen. If housing prices drop substantially during that time frame, you could find yourself buying a property for more than it’s worth.
Contract Breaches Can Be Costly
Rental agreements are a legal obligation. If you don’t pay your rent, your landlord can evict you and keep your security deposit. But rent-to-own contracts bring an additional level of risk. Missed payments mean you could be evicted and lose all the money you’ve put in. That includes the upfront fee and any rent credit you’ve earned.
All that money will also be lost if you can’t qualify for a mortgage when your rental time is up. These agreements can give you some breathing room. However, if your low credit scores, income, lack of a down payment, or employment situation make you ineligible for a mortgage, you could be searching for another rental while losing everything you’ve paid on the lease-to-own home.
Steps to Buy a Rent-to-Own Home
Once you’ve decided renting to own is the route you want to take, you may wonder what to do next. The following steps can help you ensure you get the best deal in a rent-to-own agreement.
1. Find a Home
This is more challenging than it might sound, especially if you’re looking in a competitive real estate market. Rent-to-own homes are extremely rare, so you may have to find a home for sale and try to negotiate this type of setup.
Typically, homeowners become renters when they can’t sell their homes. This means your rent-to-own contract might be on a home that’s in a less desirable or convenient area of town. For someone whose home has been on the market for a while, being able to collect rent money with the promise of a sale in a few years can be a huge relief.
For best results, find a real estate agent who can help you track down a home and negotiate with the seller. The National Association of REALTORS® maintains a directory of real estate agents, but you can also ask for a referral or find real estate agents nearby who have brokered these types of deals recently.
2. Research the Home
Even if it’s tough to find a lease-to-own home in your area, don’t snatch up the first one you find. Crunch the numbers to make sure the rent and purchase price make financial sense for you. Look at the sale history of the home to verify that the owner’s estimated purchase price is somewhat within what the median home price will likely be when your lease expires.
3. Research the Seller
The seller needs to be looked into as well. This is even more important with rent-to-own agreements since this person will be your landlord for the entire lease period. If you see any red flags during your interactions with the seller, move on.
4. Choose the Right Terms
Before you make a real estate purchase, you would have a closing attorney review the documents. The same goes for a rent-to-own agreement. Run all the paperwork past a real estate attorney to make sure there’s nothing in the contract that will hurt you in the long run.
Your real estate agent should be able to negotiate the best terms for you, including how each rent credit will help you build equity and what happens at the end of the lease.
5. Get a Property Inspection
Any time you make a home purchase, it’s essential to know what you’re buying. The same is true for rent-to-own properties. A home inspector can check things out and make sure you aren’t purchasing a home with serious issues.
6. Start Preparing to Buy
Once you start making rent payments, it’s time to start preparing for your eventual home purchase. Chances are, you’ll have to make a sizable down payment on a home loan, so plan to have that ready. Also, keep an eye on your score with all three credit bureaus and make sure you’ll qualify.
A rent-to-own contract can be a good deal for both the buyer and the seller. It can give you time to save money and improve your credit score. A real estate lawyer should take a look at your contracts and make sure your best interests are protected.
Bottom Line
Rent-to-own homes present a unique option for potential homeowners. This approach offers the opportunity to enter the homeownership arena at a slower pace, allowing individuals to build credit, save for a down payment, and experience living in the home before making a final purchase decision.
However, the rent-to-own path isn’t free from drawbacks. Potential buyers should be wary of unfavorable terms, higher monthly payments, and the risk of losing money if they decide not to buy. Ultimately, like all significant decisions in life, choosing a rent-to-own option requires careful consideration and thorough research.
Frequently Asked Questions
Where can I find rent-to-own houses?
Rent-to-own houses can be found through specialized websites dedicated to these types of listings, local real estate agents familiar with the concept, or sometimes through classified advertisements in local newspapers or online platforms.
Can I find rent-to-own homes on Zillow?
Yes, Zillow does list rent-to-own homes. When searching for properties, you can filter the search results to show only rent-to-own options. However, availability may vary based on the region and market conditions.
How long is the typical rent-to-own contract?
The typical lease term ranges from one to five years, but terms can vary based on the agreement between the homeowner and tenant.
Do I have to buy the house at the end of the lease?
No, the decision to buy is optional. However, if you decide not to purchase, you may lose any upfront fees or additional monthly amounts set aside for the potential purchase.
Can the seller change the purchase price once set?
Generally, the purchase price is fixed in the initial agreement. However, some contracts may have clauses allowing price adjustments based on market conditions.
What happens if the property value decreases during the lease period?
If the home’s value decreases and you’ve agreed on a set purchase price, you could end up paying more than the current market value. It’s crucial to negotiate terms that protect your interests.
Who is responsible for repairs and maintenance?
The agreement should clearly outline these responsibilities. In most cases, the tenant bears the responsibility for maintenance and repairs during the lease term.
What’s the benefit of a rent-to-own agreement for sellers?
Sellers can generate rental income while waiting to sell, often at a premium. It also widens the pool of potential buyers, especially those who need time to improve their credit or save for a down payment.
How do property taxes work in a rent-to-own agreement?
In a rent-to-own scenario, the property taxes are typically the responsibility of the homeowner, as they still retain ownership of the property during the rental period. However, the specific arrangement can vary based on the terms of the agreement.
Some contracts may stipulate that the tenant pays the property taxes directly or reimburses the homeowner. It’s crucial for both parties to clearly understand and agree upon who will cover the property tax obligation before entering into a rent-to-own contract.
If I don’t buy, do I get a refund for the extra money paid?
Typically, the extra money paid above regular rent, often referred to as “rent premium,” is forfeited if you decide not to buy.
Is the rent in a rent-to-own agreement higher than usual?
Often, yes. A portion of the monthly rent may be used for the potential down payment or purchase price, making it higher than the average rent for similar properties.
What’s the difference between rent-to-own and mortgage?
Rent-to-own is an agreement where a tenant rents a property with the option to buy it at the end of the lease. No bank is involved initially, and the tenant isn’t obligated to buy. A mortgage, on the other hand, is a loan specifically for purchasing a property. The buyer borrows money from a bank or lender and agrees to pay it back with interest over a predetermined period.
Does rent-to-own hurt your credit?
A rent-to-own agreement, in itself, doesn’t usually affect your credit. However, if the homeowner reports late payments to credit bureaus, it could hurt your credit score. On the positive side, consistently paying on time and eventually securing a mortgage can benefit your credit.
What is another name for rent-to-own?
Rent-to-own agreements can go by various names, including:
Lease to purchase
Lease option
Rent-to-buy
Rent-to-purchase option
Lease purchase
Each of these terms represents the concept of renting a property with the potential option to buy it after a set period.
Buying a house is a dream for many Americans, but it can feel very out of reach for some people. To qualify for a mortgage, you’ll need an adequate credit score and down payment, which many people just don’t have.
That is where the Neighborhood Assistance Corporation of America (NACA) comes in. The NACA has helped hundreds of thousands of people find affordable housing with no money down and no minimum credit score. NACA also provides financial assistance for approved homeowners that encounter financial difficulties.
If you’ve been struggling to figure out how you’ll afford to purchase a home, then the NACA program could help. This article will explain how the NACA mortgage process works and how the organization could help you find your next home.
What is the NACA mortgage program?
The Neighborhood Assistance Corporation of America (NACA), a non-profit organization established in 1988, is dedicated to providing affordable housing options to Americans. Its mission is to combat discriminatory and unjust lending practices. With 45 branches across the United States, NACA assists borrowers with low credit scores in securing affordable mortgages.
NACA offers various solutions such as property improvement and foreclosure avoidance to help achieve this goal. Additionally, the organization helps homeowners reorganize their existing mortgages, preventing them from losing their homes to foreclosure. Nevertheless, NACA’s signature mortgage program remains the most sought-after offering among its services.
How does the NACA program work?
The NACA is known for its purchase program, which it calls the Best in America Mortgage Program. This program is designed to make homeownership more affordable for everyone.
If you applied for a mortgage through a bank or credit union, you would undergo an extensive credit check. But the NACA makes it possible to buy a home with:
No down payment requirement
No closing costs
No requirement for perfect credit
No limits on your income
No fees – The lender pays the appraisal costs, attorney fees, title insurance, transfer tax, settlement agent fees, and buyer closing costs.
All of this is available at a below-market interest rate. Currently, the NACA is offering a 30-year fixed-rate mortgage of 2.125% APR and a 15-year fixed-rate mortgage of 1.75% APR. You’d be hard-pressed to find a better deal anywhere else.
Bank of America stands as NACA’s largest and most significant partner, providing a major portion of the funding for the loans.
NACA Requirements and Qualifications
Before you assume the NACA mortgage program is too good to be true, there are certain requirements you’re going to have to meet to qualify. Unlike traditional lending practices, NACA evaluates creditworthiness based on character, rather than solely relying on credit scores.
For instance, NACA members won’t be penalized for financial hardship caused by an injury or illness. But you must demonstrate that you can afford to pay your monthly housing expenses.
These expenses include your mortgage payments, property taxes, homeowners insurance, and HOA dues. And your income can’t fluctuate from month to month.
While there are no income restrictions in the NACA purchase program, earning higher than the median income could limit your home buying options to specific regions. It’s also worth noting that owning another property while closing on a NACA mortgage is strictly prohibited.
Furthermore, as a NACA mortgage recipient, you are expected to engage in a minimum of five membership activities annually. These activities include volunteering at NACA offices, participating in protests, or offering support to other members during the home buying process.
Eligible States
Unfortunately, the NACA mortgage program still isn’t available everywhere, though the organization is working hard to expand across the U.S. It’s currently available in the following states:
Alabama
Arkansas
Arizona
California
Colorado
Connecticut
District of Columbia
Florida
Georgia
Hawaii
Illinois
Louisiana
Massachusetts
Maryland
Michigan
Minnesota
Missouri
Mississippi
North Carolina
New Jersey
Nevada
New York
Ohio
Pennsylvania
South Carolina
Tennessee
Texas
Virginia
Wisconsin
NACA Program Pros and Cons
Here are some of the biggest advantages and disadvantages of taking out a mortgage through the NACA.
Pros
Buying a home with no down payment or standard closing costs
Snag a below-market interest rate on a 15-year or 30-year mortgage
No credit requirements or income limits to apply
Receive extensive borrower education and training
Cons
Time-consuming application process
Program isn’t available in all 50 states
There are limits to how much you can borrow
You’ll have to pay for property taxes and homeowners insurance
NACA Loan Limits
The NACA home buying program has loan limits that cap your mortgage amount. The purchase price of a home cannot exceed the conforming loan limit, which is $647,200 for a single-unit property in most states. The conforming loan limit for a single-unit home in Alaska and Hawaii is $970,800.
Who qualifies for the NACA program?
The NACA mortgage program is very generous, but there are several steps you’ll need to take before you can close on your home. Here are the seven steps you’ll take to complete the NACA loan qualification process.
1. Attend a free homebuyer workshop
If you’re considering applying for a NACA mortgage, you’ll first have to attend a homebuyer workshop. During this free workshop, you’ll learn more about homeownership and how to qualify for the NACA mortgage program. Then, you can register on the company’s website to reserve your spot.
2. Meet with your housing counselor
Once you’ve completed the homebuyer workshop, the NACA will assign you a housing counselor to guide you through this process. Your housing counselor will help you determine an affordable monthly mortgage payment and help you come up with a reasonable monthly budget. You’ll continue to meet with your counselor until you’ve qualified for the NACA housing program.
3. Attend a NACA purchase workshop
Once you’ve qualified for the mortgage program, you must attend a purchased workshop at the NACA office. During this workshop, you’ll review the home purchase process and work with a real estate agent to help you find the right home.
4. Receive a property qualification letter
Once you’ve chosen the home you plan to buy, you’ll have to get in touch with your housing counselor again. They will help you secure your qualification letter.
This letter states that you are qualified to purchase the home you’re interested in. Your NACA counselor and real estate agent can also help you draft an offer on the home.
5. Get your home inspected
Before you can purchase a home, it must pass a NACA home inspection and pest inspection. If the inspection reveals any problems with the home, you must resolve those issues before you can close on the home.
6. Meet with your mortgage consultant
Throughout this entire mortgage process, you should be saving money, maintaining your income level, and paying your bills on time. At this point, you’re going to meet with your mortgage consultant to prove that you’ve met the required guidelines and are ready to move forward with the mortgage application.
7. Close on your mortgage
Now it’s time to close on your home! There are no closing costs for a NACA mortgage. Additionally, NACA members do not pay private mortgage insurance (PMI).
Instead, your NACA membership provides you with a post-purchase assistance program through NACA’s Membership Assistance Program (MAP). But this is the final step that allows you to close on your new home and finalize the process.
Alternatives to the NACA program
The NACA program may not be suitable for everyone, or you may not qualify. If this is the case, consider other mortgage programs that may be available to you.
FHA Loans
For low-to-moderate income borrowers who may not meet the stringent requirements of conventional loans, the Federal Housing Administration offers the FHA loan program. With lower down payment needs and more lenient credit score standards, these loans provide a viable option for those looking to finance their first home.
USDA Loans
The U.S. Department of Agriculture extends its support to those seeking to purchase a home in rural or suburban areas through its USDA loan program. These loans offer attractive terms such as low or no down payment options and competitive interest rates, with the aim of fostering home ownership in less densely populated regions.
VA Loans
As a way to show appreciation for the sacrifices made by military service members, veterans, and their surviving spouses, the Department of Veterans Affairs provides VA loans.
These loans, exclusive to eligible individuals, boast features such as no down payment requirement, no private mortgage insurance, and interest rates that are often more favorable than those of traditional loans.
First-Time Homebuyer Programs
For those entering the housing market for the first time, many states and local governments offer programs tailored to their needs. First-time homebuyer programs often provide financial assistance in the form of lower interest rates and down payment assistance, as well as other incentives, making homeownership a reality for those who may not have the funds for a down payment otherwise.
Down Payment Assistance
To help alleviate the burden of the upfront costs of buying a home, down payment assistance (DPA) programs are available from government agencies, non-profit organizations, and private lenders.
These programs provide homebuyers with the necessary funds to cover their down payment, allowing them to get one step closer to affordable homeownership.
National Homebuyers Fund
As a non-profit organization, the National Homebuyers Fund offers down payment assistance to low-and moderate-income homebuyers in the form of grants that do not need to be repaid. Their mission is to provide a helping hand to those who may not have the resources to make a down payment on their own.
Chenoa Fund
The CBC Mortgage Agency’s Chenoa Fund is a down payment assistance program that provides low-and moderate-income homebuyers with up to 3.5% of the home’s purchase price. This support is provided through either forgivable or repayable second mortgage loan options.
Bottom Line
If you’re concerned that you don’t have the down payment or credit requirements necessary to apply for a traditional mortgage, a NACA mortgage may be a suitable option. Borrowers that qualify could receive low-interest mortgages with no down payment, closing costs, or fees. The application process is tedious, but the benefits can help you achieve the dream of homeownership.
Frequently Asked Questions
Is there a minimum credit score requirement for the NACA program?
No, NACA does not consider credit scores for mortgage approval. Instead, they look at your payment history and ability to make future mortgage payments.
Is there an income limit to qualify for the NACA program?
There is no strict income limit to qualify for the NACA program. The program is designed primarily to assist low- to moderate-income individuals and families, but it does not set an upper limit on income. The focus is more on your ability to afford the mortgage payments, and whether you meet other program criteria.
How long does the NACA mortgage process take?
The time frame can vary depending on individual circumstances, but generally, it takes several months from attending the initial workshop to closing on a home. The more promptly you can provide the required documentation and fulfill program requirements, the quicker the process will likely be.
How does the NACA mortgage differ from a traditional mortgage?
NACA mortgages typically offer more favorable terms compared to traditional mortgages. They come with no down payment, no closing costs, and no requirement for private mortgage insurance (PMI). The interest rates are often below market rate as well.
Can I use a NACA mortgage to refinance my existing loan?
No, NACA mortgages are designed for the purchase of a primary residence only. They cannot be used for refinancing existing loans or for investment properties.
One interesting aspect of the home loan process is the sheer number of individuals you’ll work with along the way.
You don’t just speak to a salesperson and call it a day. Lots of people are involved in what is a very complex transaction.
Aside from salespeople, there are loan underwriters, processors, appraisers, escrow officers, real estate attorneys, and more.
Let’s discuss the roles these people hold to help you better understand what it takes to get a mortgage.
Remember, you’re asking to borrow a large sum of money, so it’s going to take time and energy (and lots of people) to get to the finish line.
The Sales Rep/Loan Officer/Mortgage Broker
The first step in the home loan process typically involves a sales person, which can be a banker at your local branch or credit union, a loan officer, or a mortgage broker.
If we’re talking about a purchase, this may come before/during your home search or after you’ve found your property with the assistance of a real estate agent.
If it’s a mortgage refinance, you’d simply jump right to this step to rework the details of your existing home loan if you wanted a rate and term refinance or a cash out refi.
You might be referred to an individual/company, or you might do your own discovery to find a suitable partner. Either way, always look beyond the referral you were given.
Your real estate agent might know a great lender, but you your own research as well.
It’s important to gather multiple quotes from different companies to ensure you get the best deal.
Now, this individual will be your main point of contact during the loan process, and perhaps most importantly, will provide you with pricing.
Bankers and loan officers work at the retail level, while mortgage brokers offer wholesale rates from their lender partners.
You can read more about the differences (banks vs. brokers) but either way they’ll likely be the person you speak with most.
Aside from providing pricing, these individuals can help get you pre-qualified or pre-approved for a mortgage, discuss different loan scenarios, and guide you on loan choice.
If you have mortgage questions, they should be able to provide answers and give you guidance.
They may make certain recommendations, such as down payment amount, loan type, or provide an opinion about paying discount points or when to lock your rate.
This individual will be with you from start to finish, but doesn’t work alone. They’ve got an entire team to help you close your loan in a timely fashion.
FYI, you may also come across a “mortgage planner,” which is an individual who may assist a busy senior loan officer.
They can communicate loan status, provide follow-up, collect conditions, and perform other tasks if the LO is unavailable or simply needs a hand.
The Loan Processor
Once you’ve spoken to a sales representative (or LO/broker) and have decided to move forward, you’ll be in put in touch with a loan processor.
The main goal of the processor is to put together a clean loan file that can be submitted to the underwriting department.
This means collecting key documents, ensuring there are no red flags, double-checking everything, and making any necessary corrections.
The processor may also reach out after the loan is approved to collect additional documents to satisfy any outstanding conditions.
They will also provide updates to the loan officer or broker, who will then keep you in the loop about where you’re at in the process.
The processor essentially acts as a liaison between the underwriter and sales rep/LO/broker.
This ensures things move along smoothly and any hiccups can be resolved quickly without delay.
The Loan Underwriter
The loan underwriter probably holds the most important role in the home loan process.
They decide if the mortgage is approved, declined, or potentially suspended pending further explanation.
It’s for this reason that the loan processor only sends the loan package to the underwriter once everything has been thoroughly checked.
You only get one chance to make a first impression, so it’s imperative to get it right. Otherwise you could face delays or simply get flat out denied.
Aside from approving the loan, the underwriter will also provide a list of conditions needed to close the loan.
Most mortgage approvals are conditional, meaning you might need to furnish additional information or documentation to obtain your final approval.
Once these documents are provided, whether it’s another bank statement or letter of explanation, the underwriter will clear the outstanding conditions and move the loan to the funding department.
The Home Appraiser
While your loan is being reviewed by the underwriter, an appraisal will be ordered to determine the value of the underlying property.
Remember, aside from determining your ability to repay the loan, the bank also needs to ensure the collateral for the loan is valued properly.
This individual will visit the property to assess its condition, take photographs, and determine recent sales comparisons.
They will formulate a valuation based on the property details, such as number of bedrooms and bathrooms, square footage, amenities, location, lot size, condition, and so on.
The value they come up with, known as the appraised value, is used as the basis for the loan-to-value ratio.
Generally, the goal is for the appraiser to support the purchase price of the property or the value declared for a refinance.
If the value is lower, the details of the loan may need to be reworked, such as a higher down payment.
For certain types of loans, such as FHA loans and VA loans, the home appraiser will also ensure that certain Minimum Property Requirements (MPRs) are met.
This ensures the property is safe for the occupants, that there are adequate living conditions, and no major hazards, such as lead paint or termites.
The Home Inspector
If we’re discussing a home purchase, you’ll want to get an inspection done. And you’ll want to do it ASAP while any contingencies are still in place.
While a home inspection typically isn’t required, they’re generally a good idea.
Aside from finding out what’s potentially wrong with the property, you can ask for credits from the seller if the inspector finds any significant issues.
As the name suggests, a home inspector will come out to the property and assess the condition of the structure itself, the foundation, the interior, the roof, the electrical, HVAC, and more.
Some may also inspect the pool and spa, if one exists, though you could be charged extra.
They’ll make notes as they survey the property and issue a formal report afterwards. This can be used to negotiate with the seller if anything material comes up.
The Notary Public
Once it’s time to sign your loan documents, you’ll need to make an appointment with a notary public.
This individual serves “as an impartial witness” when signing important documents, such as those related to a home purchase or mortgage loan.
Your settlement agent should organize a time to meet with this individual to conduct your signing.
The notary may come to your home or meet you somewhere else to review and sign documents.
The main job of the notary is to verify the identity of the signer and ensure they are willing to sign the documents “without duress or intimidation.”
This requires you to furnish identification, such as a driver’s license, during the signing appointment.
The Escrow Officer
Another very important individual in the transaction is the escrow officer, a third-party who facilitates the loan closing and collects/disburses funds to the appropriate parties.
Some of their key roles include preparing final statements for the buyer, such as cash required to close, and determining costs such as property taxes, insurance, prepaid interest, and loan payoffs.
The escrow officer will send you a settlement statement that lists all the fees and closing costs associated with your loan, along with any lender credits and loan payoffs and funds required.
They will also liaise with a title company and forward necessary documents for loan recording.
Importantly, they’ll provide wiring instructions to all parties, including the buyer, so you know where to send funds (cash to close).
If you have questions about things like prepaid items, mortgage impounds, and loan payoffs, they can be particularly helpful.
The Title Agent
To ensure the property is free of any liens, encumbrances, or defects, a title insurance policy is usually required in order to take out a mortgage.
A title agent is the individual who conducts a title search, orders a preliminary title report, and eventually issues title insurance on the subject property. This makes them a licensed insurance agent
They are also in charge of recording the deed and loan documents with the county once the loan has funded.
You might hear the words title and escrow used interchangeably, but title has to do with property ownership/lien history, while escrow is about the calculation, collection, and disbursement of funds.
However, they may perform other settlement tasks beyond just title depending on the state where they’re located.
The Loan Closer/Funder
If you’ve made it this far, it means the loan is almost funded. But there’s still work to be done.
The loan closer/funder has to review the file to ensure everything is accurate and complete, and if not, address and fix any errors or outstanding issues.
They must ensure all prior to funding (PTF) conditions are satisfied and work with the settlement agent to prepare funding figures and timing of disbursement.
This includes the review of signed closing documents and items like hazard insurance and the preliminary title report.
And if everything looks good, request the wire instructions from escrow after a thorough review.
The Real Estate Attorney
Note that in certain states, a real estate attorney could be required to prepare certain documents and/or to conduct the loan closing.
This individual may order and certify a title report, review loan documents, and advise you if necessary.
Beyond that, they can ensure the interests of all parties are protected, and handle any legal issues or disputes that may come up.
One last thing. You may find that there is some overlap with a title company and escrow company, as the former can also provide escrow and notary services as well.
So depending on where you live, you could have one company or individual handle several tasks.
As you can see, there are quite a few people involved in the funding of a home loan, which explains why they take a month or longer to close.
Once you know more about each person’s role, it should be easier to navigate the home loan process and make better sense of it all.
And perhaps adjust your expectations that there isn’t a same-day mortgage and likely won’t be for the foreseeable future.
The Empire State’s real estate market is a bit of a mixed bag. On the one hand, parts of New York City and the Hamptons are among the priciest housing markets in the entire country. But the rest of the state, which is quite large, is full of cities like Buffalo, Rochester and Syracuse, all of which have median home prices of just $200,000 or less (according to July Redfin data).
Whether you’re buying in Long Island or selling in Lake Placid, there’s one part of the real estate transaction that you can’t avoid: closing costs. Here’s what to expect when it comes to closing costs in New York.
How much are closing costs in New York?
Closing costs vary by state, and New York is on the high side with an average rate of 3.1 percent of a home’s sale price, according to CoreLogic’s ClosingCorp. By comparison, Connecticut’s rate is 2.1 percent and New Jersey’s is 1.7 percent.
Data from the New York State Association of Realtors shows that July 2023’s median sale price for the state was an even $400,000. Applying the rate of 3.1 percent, that means closing costs of $12,400.
That number will vary greatly depending on home prices in your local market, though, and prices tend to get higher the closer you get to New York City. According to Redfin, the July median in Westchester County, just north of the city, was $770,000, which would result in closing costs of $23,870. But in Potsdam, not far from the Canadian border, the median is just $175,000, meaning closing costs of $5,425.
Who pays closing costs in New York, buyers or sellers?
Whether you’re buying or selling in the New York housing market, You will be responsible for some amount of closing costs.
Closing costs for buyers
As a homebuyer, most of your closing costs will relate to your mortgage loan. Here are some of the most common closing costs for buyers:
Loan-related fees: Many lenders charge borrowers loan application and origination fees, as well as a fee to check your credit history. If you are paying points on your mortgage, which typically bumps down your interest rate by 0.25 percent for every 1 percent of your loan amount, that fee will be part of your closing costs as well.
Appraisal and inspection fees: Your lender will likely require a professional home appraisal to confirm the home’s value (and make sure it’s worth at least the amount you’re borrowing). It’s smart, but not required, to get a professional home inspection as well. This will alert you to any problems with the home and property before they become your problem. If a major problem is discovered, you may be able to use it as a negotiation point. Expect each to run a few hundred dollars.
Title-related fees: Similar to a background check, a title search is conducted to confirm ownership and make sure that there are no liens or claims on the property. Title insurance protects you (as the new owner) and the lender if any issues arise after the deed is transferred. In some states, the seller pays for title insurance, but in New York, it’s typically the buyer. The cost will depend on your loan amount.
Taxes: At closing, you’ll likely need to prepay a portion of the year’s property taxes as determined by your local jurisdiction. These funds will be held in escrow and distributed on your behalf. Sellers pay for the base transfer tax in New York, but if you’re buying a home for over $1,000,000, you’ll be on the hook for an additional fee in the form of the state’s mansion tax, which starts at 1 percent of the sale price and gets higher the more expensive a home gets.
Attorney fees: The state of New York requires both homebuyers and sellers to be represented by an attorney at closing, so add legal fees to the list.
Closing costs for sellers
Sellers aren’t off the hook just because they’re not taking out a mortgage. Here are some of the most common closing costs for sellers:
Agent commissions: Realtor fees will be your largest expense when selling your home. Commissions typically run between 5 and 6 percent of a home’s sale price, which means the amount can be steep. On a median-priced $400,000 home, 5 percent comes to $20,000.
Transfer taxes: As the seller, you’ll need to pay New York’s real estate transfer tax, which is $2 for every $500 in home value. On a median priced $400,000 home, that’s $1,600. In New York City, an additional city tax applies.
Attorney fees: The state of New York requires both homebuyers and sellers to be represented by an attorney at closing.
Seller concessions: If you made any concessions to the buyer, such as offering to pay for a repair, they’ll be settled at closing time and taken out of the sale price.
Wire transfer fee: If there’s a balance left on your mortgage, it will be taken out of your sale proceeds and wired to your lender. There may be a fee for this.
Lowering your closing costs in New York
You might be surprised to learn that many closing costs are negotiable (except for government-assessed fees like property and transfer taxes, of course).
For home sellers, your most expensive cost is also one of the most commonly negotiated: the Realtor commission. If your agent is willing to lower their commission by even a little, it could save you a lot. For example, a 5.5 percent commission on a median-priced $400,000 home, rather than the full 6 percent, will save you $2,000.
Buyers can explore down payment assistance programs, which help cover closing expenses for qualified buyers via low- or no-interest loans, grants and more. There are options specifically for first-time homebuyers in New York as well. And remember that different lenders may offer different rates, terms and fee structures, so be sure to shop around for the best deal. Don’t be afraid to ask the seller for concessions, either. They might not agree to pay for that plumbing repair (for example), but it doesn’t hurt to ask.
Find a local real estate agent
New York’s real estate market is unique and complex, and the best way to navigate it is with the help of an experienced local real estate agent. If you don’t have one, a great place to start is by asking for referrals from friends and family. Do some online research, too. Interview a few different candidates to find someone who’s a good fit — and if you can find someone who knows your specific area very well, or even your specific neighborhood, all the better.
FAQs
According to data from ClosingCorp, closing costs in New York average 3.1 percent of a home’s sale price (not including agent commissions). The median price in the state was $400,000 as of July, per the New York State Association of Realtors, so the closing costs on a median-priced home would come to $12,400.
Real estate agent commissions, typically paid by the seller, are the most expensive part of closing costs, typically totaling between 5 and 6 percent of a home’s sale price. For a median-priced $400,000 New York home, 5 percent comes to $20,000.
The Keystone State boasts an array of architectural styles, reflecting its rich historical tapestry, from colonial heritage to contemporary design. In such a diverse setting, the home inspection offers a unique perspective into the essence of a potential new home, uncovering both its inherent charm and potential challenges. Conversely, sellers can leverage this process to transparently highlight their property’s worth and proactively address any concerns.
So, whether you’re starting your journey buying a home in Philadelphia or preparing to sell a house in Pittsburgh, this Redfin article provides comprehensive guidance on navigating the home inspection process in Pennsylvania with valuable insights from local home inspectors. Equipped with this knowledge, you’ll confidently navigate the Pennsylvania real estate market.
Why should you get a home inspection in Pennsylvania?
“The houses in Pennsylvania, half of which were built before 1959, can certainly give a neighborhood character, but can also cause a multitude of problems for the occupants,” mentions Wolfe Home Inspections LLC. “Some of the old homes are filled with health hazards such as asbestos, lead paint, radon, and outdated wiring. Our picturesque rolling hills can also lead to moisture issues and foundation problems. It’s imperative that home buyers hire themselves a highly qualified home inspector to thoroughly evaluate the property for these potential issues.”
Are there any specialized inspections that Pennsylvania buyers should consider?
“Buyers should consider getting specialized inspections when necessary,” says Win Home Office. “Many buyers opt for a standard home inspection but specialized inspections, such as Mold Testing, Infrared Scanning, Radon Testing, Sewer Scope Inspections, and Fireplace and Chimney Inspections can help ensure that buyers are not only making a sound investment, but also prioritizing their future health and safety in that home.”
How much does a home inspection cost in Pennsylvania?
“The cost of a home inspection in Pennsylvania can vary based on factors such as location and the size of the property, but it generally ranges from $300 to $500,” notes Briton Inspection Services Pittsburgh.
Expert advice for Pennsylvania buyers before they get a home inspection
“Home buyers are smart to have a home inspection prior to purchasing the home as a second set of trained eyes can provide extra value in the form of a documented report on the property,” advises Kirschner Home Inspections, LLC. “A home inspection report documents the current condition at the time of the inspection and highlights any potential deficiencies. If major deficiencies are identified, the buyer may utilize the information in making a final decision on the purchase of the home or possibly negotiating a better offer.”
Ask your agent to point out possible problems
“Ask your agent during your initial or subsequent house showings if they see any possible home inspection issues,” shares The Home Pros. “Agents will regularly solicit important information from their trusted home inspectors before the offer. This can eliminate surprises during the actual inspection.”
Attend the home inspection
“I highly encourage attending your home inspection,” insists Heritage Home Inspectors. “This gives you the ability to become very comfortable and familiar with your new purchase and allows you to ask the inspector any questions while onsite together. Gaining a strong understanding of your future home is an excellent way to start your home ownership.”
Hire a certified home inspector
“Pennsylvania does not have a state level license for Home Inspectors, though many of us carry state credentials for additional services, like radon testing, mold sampling, and wood destroying insect inspections,” says The Watson Team. “Because of this, it is important to make sure that the home inspector you are hiring is fully certified by a national association like ASHI and/or interNACHI.”
Pennsylvania home inspection: the bottom line
In the realm of Pennsylvania real estate, where history merges with contemporary living and unique environmental factors come into play, home inspections hold immense importance. Whether scrutinizing over buying historic homes or brand-new constructions, the pivotal factor is better understanding what’s going on inside the home beyond its exterior. For both buyers and sellers in the Keystone State, a thorough home inspection is not merely recommended—it’s imperative. It guarantees well-informed choices, transparency, and the smooth execution of property transactions.