FHA Home Loan Do's and Don'ts
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Do Start Saving Early
Home loans can have unexpected costs. For example, if the appraisal reveals evidence of termites or other pests, paying for an exterminator or related services may be necessary.
You may be able to negotiate with the seller on this expense, and it’s just one example of the kinds of costs you may have to deal with down the line. Save some extra money for these where possible.
Don’t Assume You Need a Real Estate Agent
If you know your housing market well and feel confident you can weed out the not-right-for-you homes, a real estate agent may not be necessary.
Conversely, if you are new to the housing market and don’t know your way around, it may be wise to consider using one. If you are shopping for a new home from out of your local area, an agency may be able to help.
Do Ask Questions
Ask the seller how old the roof is, and ask the lender how much experience they have with your type of mortgage. Be sure to ask about essential options like seller concessions and how much the lender’s fee will be on the loan. It may feel a bit imposing to ask these questions at first, but doing so gets easier the more you do it.
Don’t Skip The Inspection
The equation is simple. If you like disappointment in the home you buy and don’t mind paying for repairs you didn’t know you would need, go ahead and skip the inspection. Otherwise, consider it a required part of being an informed buyer.
Don’t Assume
Some borrowers think it’s possible (at first) to skip the title search or the appraisal or that their earnest money counts as a portion of their down payment.
However, a title search is required for any loan requiring title insurance. You can’t skip an appraisal, but depending on the FHA mortgage, it may be for the property's after-repair value (applicable for renovation loans and construction loans).
Earnest money is paid at the start of the home loan journey when you offer a house. Your down payment is rendered at closing time, and these are two separate payments.
Do Your Research
What is the average age of the homes in the market you are buying in? Is it a new construction suburb?
Your concerns with replacing the roof or mechanical systems in the home may be a decade or two away. But if the homes are older, the time between the purchase of the home and repairs made to it may be shorter, and that’s a detail worth considering before you buy.
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