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Is a termite inspection required for a conventional loan?

Termite inspections are done in order to detect any early termite activity in the house. Normally, termite inspections are done annually in which an inspect the interior, and exterior of your home for any possible termite activity. The termite inspection is done even if the property is new construction. The termite inspection is required to detect any termite infestation activity as soon as possible because the presence of termite can cause some serious damages and expensive repairs. In order to control termite activity, it is recommended to use pest control measures to stop the wood destroying. Even though termite inspection is an important feature but it is not necessarily required by a conventional loan unless it is explicitly mentioned. If the purchase contract indicates in section 4(a) that the seller should pay for the inspection only then the termite inspection is required. Moreover, if the contract is not marked and the buyer is not signed with the Wood Destroying Pest Inspection and Allocation of Cost Addendum, the termite inspection will not be required. In this article, we will further look into different aspects of the inspections and requirements for conventional, FHA, and clearance of mortgage.

Is an inspection required for a conventional loan?

When you are buying a home, you list the inspections you want to be done. Inspection contingencies are extremely regular in those exchanges, and all things considered, the mortgage lender will need to ensure that the examinations were finished and acknowledged by the purchaser/borrower.

It has been observed that normally a mortgage lender or a conventional loan requires only a home appraisal, in order to determine the actual price of the property because the real estate agents may not justify the price for that property. They don’t usually require an inspection of the loan. The same is not true for an FHA, in FHA there are some requirements. But for the sake of conventional loans, an inspection is not required and an option, and only a home appraisal can do the job for you. You can decide on your own if you want an inspection before getting the conventional loan because an inspection helps you understand and gauge a reasonable price of the property.

What states require a termite inspection?

In order to acquire a VA home loan, in some states the termite inspection is a must. The loan rules state that wood-destroying pest inspection is required in some parts of the country. The reason behind this requirement is that according to industry statistic, every year termite activity damage about half a million homes, and the owner spend approximately $5 billion to fight them. This is the reason that more than 30 states require a termite inspection before a home loan can be closed. This is to make sure that the home or any new construction is free of any termite activity.

If the property you want to get VA for is in the following states and you’re pursuing VA Streamline Refinance then you must get the termite inspection done. The states are as following:

  • Alabama
  • Arkansas
  • Arizona
  • California
  • Connecticut
  • Delaware
  • Florida
  • Georgia
  • Hawaii
  • Iowa
  • Illinois
  • Indiana
  • Kansas
  • Kentucky
  • Louisiana
  • Massachusetts
  • Maryland
  • Mississippi
  • Missouri
  • North Carolina
  • Nebraska
  • New Jersey
  • New Mexico
  • Nevada
  • Ohio
  • Oklahoma
  • Pennsylvania
  • Rhode Island
  • South Carolina
  • Tennessee
  • Texas
  • Utah
  • Virginia
  • West Virginia
  • Washington, D.C.

 

What condition does a home need to be in for a conventional loan?

Conventional loans are not government-backed and are provided by private lenders. It is a type of mortgage lender that is not insured or guaranteed by the government. Often, when people think about the mortgage, they are most probably thinking about conventional loans. Most standard mortgages adjust as far as possible set by the Federal Housing Finance Agency (FHFA) and follow the FICO rating and initial installment rules set by the legislature supported endeavors known as Fannie Mae and Freddie Mac.

There are not many eligibility requirements for getting conventional loans generally a buyer with good credit points and some money for the downpayment can easily qualify for conventional loans. Remember that traditional moneylenders are allowed to implement prerequisites that are stricter than the rules set by the FHFA, Fannie, and Freddie. In case you’re applying for a regular home loan after dispossession or liquidation, it may be harder to qualify, for instance.

Credit Score Requirement:

If you want to qualify for the conventional loan, it is required that you must have a credit score of 620-640. If the score is less than this limit, you may not be eligible for conventional loans.

Down Payment Requirement:

There are many misunderstandings about the downpayment requirement. People normally think that downpayment is very big, but actually, the required downpayment for a mortgage is only 3%. However, the downpayment must be more for a buyer who has fewer credit points. But if credit scores are as per requirements, then a 3% downpayment will do the job and convince the lender.

Is a termite inspection required for an FHA loan?

Unlike a conventional loan, FHA loan has a strict policy regarding termite inspection for an existing home. These policies can be found in HUD Handbook 4000.1. However, these requirements are not valid for a newly constructed property because there shouldn’t be any termite infestation.

An FHA lender is required to confirm that the property is free of any termite activity before the FHA loan can be approved a lender can inspect the home with the help of an appraiser or checking the FHA inspection report. In case of any termite activity, he must take pest control measures and remove the termites, so the FHA loan can be approved for the home. However, on the off chance that that review report suggests an extra termite assessment, at that point, the bank must make sure about a duplicate of that too. Toxic soil treatment for pest control isn’t allowed if a well is utilized for the water flexibly on the property. A special case can be made if the moneylender gets confirmations that the treatment won’t negatively affect the water gracefully.

Dean Adams

Dean Adams has spent the majority of his life in real estate. The son of a realtor, he grew up going to open houses and even had a business where he baked cookies for other agents to display at their open houses Today, Dean has spent his career in the real estate space and is an active writer and multifamily investor