House Hunting Basics: How to Find a Home that is Easy to Finance

Getting pre-qualified for a mortgage is a great first step in buying a home, but it doesn’t ensure you will get the mortgage you want. If your lender’s appraisal indicates that your prospective home is not safe and structurally sound, you may find it difficult to get a fixed-rate mortgage with a reasonable down payment. You may also experience delays in closing as you renegotiate the value or who will conduct/pay for the repairs.

You can reduce or eliminate surprises and complications in the homebuying process by learning which signs indicate that a home is not mortgage-ready. You may be tempted to ignore the defects in a home you have fallen in love with, but with a little education, you can save time, money, and heartache by identifying problems before you sign on the dotted line.

Homes include complex and interconnected systems, which must function well to protect the structure’s safety, comfort, and integrity. Before you make a final decision to buy, consider hiring a professional home inspector to confirm the safety and soundness of your future abode. The cost of an inspection is minimal in relation to the larger investment you will make in your home.

Here are some issues with home systems that you should look out for as you view potential new homes:

Roof

Without an inspection, it can be difficult to impossible to assess a roof’s structural integrity. However, weaknesses manifest in a variety of ways, some of which are quite easy to identify when you know what to look for.

• Examine the surface of the roof to see if it is warped, has cracked or missing shingles or tiles, or is infested by moss or mold. These issues indicate that the roof structure is compromised and may require extensive repair or replacement.
• Assess the paint beneath the roof overhangs. Peeling is an indication of a moisture problem, which will continue to deteriorate the paint and boards, reducing the structural integrity of the building.
• If you are able to access the attic, check for shafts of light coming from outside. If the damage is extensive enough to let light in, you can be assured it lets in water and allows heat to escape.
• Check skylights for leaks. When skylights are improperly installed, water lines may appear around the window. Leaks invite excess moisture, which can breed mold and rot.
• Look for signs of damage or wear on the chimney. If you can find a vantage point, check around mortared joints and edges and note any displaced flashing or shingles around the base of the chimney.

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Foundation

A poor foundation places a house in perpetual danger of structural issues that may increase and become more evident over time, potentially costing you thousands of dollars in repairs.

• Check the foundation for large horizontal cracks (a few small cracks are normal). Anything that measures a third of an inch or more could be an indication that the house is settling unevenly, which may eventually pull at the framing and cause serious structural issues.
• Look for signs of water damage in the basement. If the basement has flooded in the past, it will likely flood again.
• Check for condensation, mold, or mildew.
• Inspect the walls, particularly around doorways and windows, for cracks that indicate uneven settling.

Floor

In order to examine the floors, you may need to pull up carpeting (if it is not attached to the floor) and move furniture.

• Assess the wear and tear of the floor and the support systems for the floor.
• Check under carpets for moisture or mildew and note any toxic aromas rising from the flooring.

HVAC and Electrical

Even if you know little about electrical and mechanical equipment, you can do your best to differentiate between older and newer systems.

• Ask the owner or realtor to turn on the furnace or other heating systems to demonstrate that they are in good repair.
• Check equipment for signs of aging, including rust, cracks, and dents. Request records of all maintenance or repairs. If you see or hear anything that seems out of the ordinary, the system may be on its way out.
• Examine the ducts and vents for moisture, mold, loose connections, or gaps. Because the ducts move air throughout the house, leaks can reduce the system’s effectiveness, and mold can cause health problems.
• Check out the wiring system and note any exposed or frayed wires or wiring that looks “homespun.” Avoid knob and tube wiring—recognizable by its copper conductors that pass through porcelain insulating tubes, which are often nailed in place, this is an outdated electrical wiring system that can pose a fire threat as its wires degrade.

Plumbing

• Flush the toilets to ensure they flush completely and can handle a normal amount of toilet paper.
• Run the sink and shower faucets and make sure the drains are clear.
• Confirm that the water is potable.

Building Envelope

The building envelope is the physical border between the heated/conditioned portion of the home and the outdoors and unheated/unconditioned spaces of the home.

• Look around the doors to see if there are any noticeable gaps. Small air leaks can lead to big heat loss, so if you can see light coming through from the outside, the door systems (frames and all) may need to be replaced.
• Check for moisture and mold on walls and ceilings (particularly in the bathrooms) and in the attic, where moisture often collects. Mold puts off an odor, so you may smell it even when you can’t see it.

Safety

• Make sure that all staircases have handrails.
• Check the electric panel. It must have a door!
• Ensure the sockets have Ground Fault Circuit Interrupters (GFCIs) in all wet areas, including the bathroom, kitchen, laundry room, and garages.
• If there is an apartment or living space above the garage, make sure fire code sheetrock is installed between the garage and the living space.
• Examine the smoke, carbon monoxide, and home security alarm systems and ensure they are all working properly.
• Test decks and porches for stability. Decks must have guardrails to meet safety standards.

If you find safety and structural issues in a home you have your heart set on, you don’t have to give up hope. You may decide the issues are too large to conquer or you may opt to negotiate to have the owner take responsibility for the repairs. Either way, you will have more information about the homes you are viewing and will therefore be able to make a more informed choice about the home.

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About Tammy Farnham

With over 26 years of credit union experience, Tammy Farnham is a mortgage originator who serves the mortgage needs of Vermont families in Northeastern and Central Vermont, including Essex, Caledonia, Orange, Orleans and Washington Counties. Tammy enjoys helping Vermonters with their financial needs and assisting borrowers with their mortgage needs. Tammy grew up in Plainfield, where she currently lives with her husband and two grown children. She spends her free time helping with her family business, Farnham Farm Maple Sugaring. She likes to do crafts and gardening and spend time with family, friends, and her dog Callie.

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