FHA financing has become increasingly popular lately and many buyers with a 3-5% down payment find this option appealing.
There are some key points to keep in mind during a home search if you’re going with an FHA loan product. The condition of the house actually matters and some houses just will not be a good match for FHA. Particularly with bank owned, pre-foreclosure or distressed properties, many times the property condition is less than ideal.
If there are missing appliances, holes in walls, missing light fixtures, obvious damage from plumbing or roof leaks, blatant safety concerns (damaged decks, steps, railings) these are all huge red flags!!!
The reason they’re red flags is because many times distressed properties are being sold “as-is”, meaning the seller will not make any repairs.
Why is this a problem for FHA buyers? Because FHA appraisers will note any deficiencies that must be repaired for the loan to be approved and if the seller won’t fix anything, there’s a real possibility the contract will fail due to the property’s condition.
So, for buyers planning to finance with an FHA loan, it’s extremely important to keep property condition in mind when searching for Charlotte NC homes.
Many distressed properties are priced attractively….because of their condition. While searching for a home, make sure to keep in mind whether your financing will be a good match for the house.
Related Articles: The Importance of Pre-Approval
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