phone-symbol-of-an-auricular-inside-a-circle Call (855) 610-1112         email Email

Mortgage Blog

How to get a home loan

Jim Quist is the president and founder of NewCastle Home Loans. He has 20+ years of mortgage lending experience as a business owner, mortgage underwriter, and loan officer. Jim's goal is to help people buy homes.

Jim Quist is the president and founder of NewCastle Home Loans. He has 20+ years of mortgage lending experience as a business owner, mortgage underwriter, and loan officer. Jim's goal is to help people buy homes.

The complete guide to home inspections

Home inspections are one of the most important parts of buying or selling a home. The inspection report directly affects whether or not a deal will go through and the home’s price. Negotiations can be tough, and you need to know what to expect.

In this blog, we’ll cover everything included in a home inspection, why they are vital, and what to expect in the home inspection report.


What is a home inspection?

A home inspection is an objective exam by a licensed home inspector who examines the condition of the home’s structure and systems. After the inspection, the inspector provides an extensive report that includes summaries, notes, the life of major systems/equipment, and recommended repairs or replacements on red-flagged items.

A standard home inspection takes approximately two to three hours and includes an examination of the following:

  • Heating system
  • Central air condition system
  • Interior plumbing
  • Electrical systems
  • Roof
  • Attic and visible insulation
  • Floors, walls, and ceilings
  • Windows and doors
  • Foundation
  • Basement and structural components

The goal of the inspection is to provide the home buyer and seller with a clear picture of the condition of the home and identify any current or future problems. This allows the seller to make any necessary repairs before the sale or negotiate the repairs with the buyer.

Typically, a home inspection is ordered after the sales contract is signed, which should include a clause stating the purchase is contingent on the findings of the home inspection. Although you are not required to attend the inspection, it’s highly recommended so you can ask questions along the way.

Since the home inspection is a visual walk-through, the inspection may not reveal every issue with the property. Unless requested, the home inspection will not include testing for radon, mold, and other hazardous materials.


Why do I need a home inspection?

As a homebuyer, the inspection could save you a ton of money before you’ve moved in by identifying needed repairs and replacements. The inspection allows you a chance to negotiate the repairs or the price of the home with the seller. Given the issues in the house (short-term and long-term), you can decide whether or not you’d like to move forward with the purchase.

As a seller, fixing the home’s imperfections and problems increases your chances to sell and close on the home without any issues.


What does a home inspection report look like?

Red flag ticket items will be the first items noted on an inspection report. The licensed inspector examines the property and drafts a summary of potentially significant findings. The inspector summarizes any safety hazards and deficiencies requiring major expense to correct or items they would like to draw extra attention to. Each item will be broken down to the particular area of the property and will have a brief explanation of the issues. There will also be pictures of every flagged issue. Below is an example of a line item in the report:


What if I receive a bad report?

Only in very rare instances will a home inspection report come back flawless. Whether you’re buying or selling the property, you should expect some issues to come up in the report.

If you’re the buyer, review the report with your realtor, attorney, and loan officer in order to decide on what are the best next steps. Since reports may include a large number of defects, you will want to sift through what is minor, serious, and if any red flags require some negotiation with the seller. As we noted earlier, you may be able to negotiate the price of the home down or include a clause stating the seller will fix certain items in the report.

If you’re the seller, you will also want to work with your agent and sift through what’s major and minor in the report. Most items will likely be small enough to ignore. However, it’s not uncommon to find potential deal-breakers on the list. If you find yourself in this situation, you will have to make a decision whether you reduce the price of the home, offer closing credits, make the repairs, or not move ahead with the deal.

However, negotiations can be difficult for both parties. Repairs could potentially delay the closing of the home. Many times, the seller will negotiate a closing credit to reduce closing costs for the buyer rather than make the repairs right away. Trusting your agent is important in these negotiations.


How much does a home inspection cost and who pays for it?

The home inspection fee may vary depending on the property’s location, size, and age. However, they generally cost between approximately $250-400 but could be more or less. Keep in mind - the fee is worth it. You’d rather pay $300 than move in and find out you have $3,000 in repairs.

In most instances, the buyer pays for the inspection, but this is negotiable.


What’s the difference between a home inspection and home appraisal?

The home appraisal and home inspection are two different things. A home appraisal determines the value of your home based on location, age, and square footage as well as current market conditions. The home inspection report determines the overall health and condition of the property.


If you’re the seller, preparing helps improve the report.

Although a home inspection is an objective assessment, making sure the inspector has easy access to everything in your home is in your best interest. Specifically, make sure they can get to the furnace, attic, HVAC, water heater, and electrical panel without any issues. In addition, the inspector will want to get into crawl spaces and be able to find drainage points. Getting rid of the clutter in your yard and house will work in your favor. Not to forget, make sure all utilities are on as well as pilot lights.


How do I find a home inspector?

Your real estate agent and loan officer will likely have a list of licensed home inspectors they have worked with before. You can also search and read reviews of home inspectors in your area online.


When in doubt, ask an expert.

Whether you’re buying or selling, talking with a professional who has gone through the process with other clients is critical. They will be able to set proper expectations. Most importantly, they will be able to help you through negotiations, if necessary.

If you have any specific questions, feel free to reach out to us through the chat on the bottom right-hand corner of your screen or call us at 855-610-1112. And if you’re still early in the home buying process, make sure to download our free first-time home buyer’s guide so you have a clear picture of what to expect as you buy a home and get approved for a mortgage.

Get our FREE First-time Home Buyer Guide!

You may also like:

How future rental income can help you buy an investment property

See how to calculate the rental income to get approved for a mortgage to buy an investment property. Not all borrowers can use the rental income because...

How a mortgage cosigner can help you get approved for a home loan.

What you need to know about adding a mortgage cosigner to your home loan application. Check out our complete guide about non-occupant co-borrowers...

Using Future Rental Income From Your Current Property to Buy a New Home

Rent out your departing residence. Use the future rental income to get approved for a mortgage to buy a new home. Step-by-step, examples explaining how you can...