By Sabrina Karl
Among the myriad steps of buying a new home is having a home inspection performed once you’re serious about purchasing a specific house. But as far as your lender is concerned, is a home inspection required?
Home inspections are certainly a smart move. Performed by certified professionals, the inspection will evaluate the existing condition of all aspects of a house, including the roof, foundation, electrical and plumbing systems, heating and cooling mechanicals, walls, windows, and insulation.
These inspections typically cost $300-$500 and result in a detailed report laying out the area-by-area findings throughout the house.
Typically, homebuyers order a home inspection after having their offer on a house accepted, giving them a chance to negotiate any price adjustments based on deficiencies or required repairs identified by the inspection, or to abandon the offer altogether.
As smart as it is to order an inspection, however, your lender almost certainly won’t require it. What mortgage lenders do require is an appraisal of the home, but this is not at all the same as a home inspection.
Whereas an inspection assesses the quality and condition of the home’s structure and its major systems, an appraisal aims merely to determine the home’s fair market value, so the bank can be sure the requested loan is appropriate given the value of the property.
One exception is for FHA loans, where the required appraisal also includes a basic inspection to determine that the home is safe and habitable. But the FHA inspection component comes nowhere near the comprehensiveness of a professional home inspection.
Gaining a complete understanding of a home’s physical strengths and weaknesses before you purchase it is invaluable. Just be clear that the inspection is an investment you make to protect your own interests — and peace of mind — rather than the lender’s.