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MORTGAGE KNOWLEDGE CENTER

PenFed Mortgage with Confidence

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CONVENTIONAL LOANS

Rates starting at % (APR %)¹

 

Apply before becoming a member.

After your application, we’ll help you:

1. Discover you’re eligible to become a PenFed member

2. Open a Savings/Share Account and deposit at least $5

  1. Home
  2. Mortgage Knowledge Center
  3. What to Look for When Buying a House

MORTGAGE

What to Look for When Buying a House

EXPECTED READ TIME:3 MINUTES

June 4, 2021

When you're looking to purchase a home, there are several essential items to check before you make an offer. You can find some of this data on the listing. But for many of these items, you'll need to view the home in person. Plus, there are questions to ask when buying a house. Preliminary checks don't take the place of a home inspection or appraisal. But if you find some of these problems, get more information from the seller. Depending on what they say, you may need to think twice before making a full-price offer or any offer at all. Here's a short DIY home inspection checklist to help you when you're viewing properties.

Smells and Odors

One thing you can't tell when viewing a home online is if there are any smells. That's why if you're highly interested in a property, you have to visit in person. And if the home has a strong smell of air fresheners, there's a good chance there's something to hide.

Pet stains on the carpet can mean some of the subfloors needs to be replaced. And if you have severe pet allergies, think twice about purchasing a home with a lot of pets. It can be done, but you'll have extra costs like carpet removal and heating and air duct cleaning, and sanitizing.

The same thing is true for a home with smokers. All interior walls, ceilings, and woodwork will need to be sealed with a good primer to lock in the smoke and then repainted with high-quality paint. Any other surfaces and cabinetry will need to be washed thoroughly.

Foundation Issues

What to check when buying a house includes the current condition of the foundation. If there are issues, they can be costly to fix. Generally, you're going to want to look for cracks in the floor, walls, and ceiling. That can be an indication of settling. A few small cracks here and there usually aren't a problem. If there have been any major foundation problems in the past and especially insurance claims, the seller should disclose that information whether they're using an agent or not.

Roof Problems

Just like the foundation, the roof is an important part of the home because it protects the interior from the elements. An old roof or one that leaks can mean having trouble finding a lender willing to give you a mortgage. In that case, the roof may need to be replaced.

Your realtor can find out the roof's age. An older roof can still be in good condition, but you may find your homeowners' insurance is a bit higher. A new roof on any home for sale is a significant advantage, that's one less thing you have to worry about replacing. Plus, your homeowners' insurance should be less.

Ceiling Stains or Sags

When touring the inside of the home, make sure to look at all the ceilings. Stains are an indication of a current or past leak. And even if you're viewing a newly built home, it's still essential to check out the ceilings. If you see any part of the ceiling that sags, that's an indication there was built-up moisture, and the material was damaged.

Sloping — Floors, Retaining Walls, Pavers

Some parts of the country that get a lot of rain or snow can have drainage problems. For example, if you are buying a house in Florida, watch for drainage issues. That's why it's smart to walk around the outside of the home.

Is any drainage flowing away from the house? Are you walking in extremely soggy areas? Do you sink into the ground? Is there standing water near the foundation? Do you see any sinking pavers or crumbling retaining walls? This could be a sign of drainage issues.

That's why shopping for a home in the winter can be a great idea. Then you can see if there are any issues in bad weather.

Basement

If the home has a basement, the first thing to be aware of is if it smells damp. That can mean there's mold or mildew — not always, but sometimes. Also, make sure the drainage outside around the foundation is going away from the house. That damp smell can carry through the entire home. There are ways to remedy this, from waterproofing the walls to making sure there are no foundation cracks.

Other Fast Things to Check

  • Lights: A quick test of how some of the electrical is doing is just to flick the lights on.
  • Doors: Do they close quickly, or do they stick and drag? That could mean settling and foundation issues.
  • Windows: Can you raise and lower the windows? Are any painted shut?
  • Screens: Do they have screens? If so, are they in good condition?
  • Pests: Are there any noticeable pests like bugs or droppings? An exterminator may be needed.
  • Noise: Do you notice excessive noise from the street, neighbors, or barking dogs?

What to Look for When Buying a House As-Is

When a seller doesn't want to repair anything, they'll sell the home as-is. Fixer-uppers will often be sold as-is. That's fine if you're handy and can do the work yourself or have the money for a contractor. But, depending on what's wrong with the property, you could have a problem getting financing.

For more information about PenFed Mortgages:
 

PenFed Mortgage: 

800-970-7766

Get Started

SIMILAR ARTICLES

10 Things to Do If You Plan to Buy a House in 6 Months

Learn how to buy a house in six months, what the different types of mortgages are, the cost of homeownership, and more.
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Comparing Types of Mortgages

Need tips for comparing types of mortgages? Discover the answers to what different types of mortgages are available and what type of mortgage is best for you.
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How Much Home Can You Afford?

Buying a home can be exciting, but are you dwelling about homeownership costs and how much you can afford? PenFed provides a closer look at homebuying budget basics.
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Spring Real Estate Market Buying Tips

Spring is the best time of the year to buy a house. Discover our spring real estate market buying tips like when the season starts and its busiest months.
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image

CONVENTIONAL LOANS

Rates starting at % (APR %)¹

 

Apply before becoming a member.

After your application, we’ll help you:

1. Discover you’re eligible to become a PenFed member

2. Open a Savings/Share Account and deposit at least $5

Home Buying Steps

  • Getting Started
  • Finding a Home
  • Getting a Mortgage
  • Home Ownership

Mortgage Topics

  • VA Loans
  • Conventional Loans
  • First Time Homebuyer
  • Home Equity
  • Homebuying 101
  • Checklists
  • Adjustable Rate Mortgages
  • PenFed Top 10
  • Refinance
  • Jumbo Loans
  • FHA
  • Videos

Mortgage Products

  • Mortgage Center
  • Refinancing
  • Home Equity

PenFed HELOC

Rates as Low as % APR* with flexible use of funds

Apply before becoming a member.

After your application, we’ll help you:

1. Discover you’re eligible to become a PenFed member

2. Open a Savings/Share Account and deposit at least $5

Disclosures

1Except for holidays, rates are updated Monday through Friday at 10:15am EST. The advertised rates and points are subject to change. The information provided is based on discount point, which equals percent of the loan amount, and assumes the purpose of the loan is to purchase a property with a 30-year, conforming, fixed-rate loan. Loan amount of $400,000; loan-to-value ratio of 75%; credit score of 760; and DTI of 18% or less. The property is an existing single-family home and will be used as a primary residence. The advertised rates are based on certain assumptions and loan scenarios, and the rate you may receive will depend on your individual circumstances, including your credit history, loan amount, down payment, and our internal credit criteria. Other rates, points, and terms may be available. All loans are subject to credit and property approval.

*Prime Rate is % as of . The APR for this Home Equity Line of Credit (HELOC) is based on prime plus a margin and can change monthly. Fixed Rate Advances will be amortized over the Fixed Rate Advance Term, with the payment consisting of principal and interest. Your Annual Percentage Rate for a Fixed Rate Advance will be calculated by adding your Prime Rate, your Margin, and the Additional Fixed Rate Lock-In Margin. Your Annual Percentage Rate for a Fixed Rate Advance shall not exceed 18% and shall be equal to or greater than % for primary residences and second homes.

  • Annual Fee: Notwithstanding the foregoing, an annual fee of $99 will be assessed on each account anniversary.
  • Home equity lines of credit (HELOC) are variable rate loans and the interest rate is subject to increase after consummation of the loan on monthly basis. Closing costs range between $500 and $8,500 for credit lines of $500,000. Contact a representative for additional details.

Appraisals: PenFed will attempt to establish value via an independent method. If that method is unsuccessful, or the value is not sufficient for the amount requested, an appraisal will be required regardless of CLTV. An appraisal is always required in the following circumstances:

For all loans with a loan amount greater than $400,000.

If an appraisal is required, it must be ordered by PenFed. You will be contacted for authorization and payment prior to ordering. Appraisal fees average $550 to $850 (some run higher).

  • Closing Cost Credit: PenFed will pay most closing costs associated with a home equity line of credit (HELOC), which includes credit report, flood certification, settlement/closing, property ownership and encumbrances search, recording, property search, and quick close. Member is responsible for any city, county, and/or state taxes if the subject property is located in FL, LA, MD, MN, NY, TN, or VA. If an appraisal is required, the member, who is responsible for the fee whether or not the loan closes, will pay the cost.

Interest may be tax deductible, consult a tax advisor for further information regarding the tax deductibility of interest and charges.

Fixed Rate Advance Lock-In You may lock in an Annual Percentage Rate for Advances during the Draw Period. During your Draw Period, you may choose to have three separate Fixed Rate Advances locked in at any one time, with a maximum of two new Fixed Rate Advances per calendar year. Each Fixed Rate Advance must equal or exceed Ten Thousand Dollars ($10,000.00) and you may not request a Fixed Rate Advance that would cause the amount you owe to exceed your Credit Limit. The only term option for your Fixed Rate Advance is 240 months (“Fixed Rate Advance Term”). However, the term of your Fixed Rate Advance cannot exceed your Repayment Period.

Fixed Rate Advances will be amortized over the Fixed Rate Advance Term with the payment consisting of principal and interest. Your Annual Percentage Rate for a Fixed Rate Advance will be calculated by adding your Prime Rate, your Margin and the Additional Fixed Rate Lock-In Margin. Your Annual Percentage Rate for a Fixed Rate Advance shall not exceed 18% and shall be equal to or greater than % for primary residences and second homes and 4.75% for investment properties.

Property Insurance: Property insurance is required.

Multiple PenFed Loans: Multiple PenFed Equity loans and HELOCs are available as long as the member and collateral qualify (except Texas). For Equity loans and HELOCs the total indebtedness cannot exceed $500,000 for all PenFed Equity and HELOCs combined.

PenFed does not lend on:

  • Mobile homes
  • Co-ops or time-shares
  • Properties that are currently listed on the market for sale
  • Commercial property or property used for commercial purposes, even if a residence is part of the property
  • Undeveloped property (land only)
  • Properties with more than 4 units

Properties that are currently under major construction/renovations: Property must be fully livable, with no safety issues. (Examples: no missing rails from stairs/decks, no open walls with wires showing, missing kitchen appliances/counters, missing bath fixtures or unfinished pool).

  • Additional limitations may apply

Home Equity Line of Credit:

  • This Account has a Draw Period of 10 years, followed by a repayment period of 20 years.
  • If only minimum payments are made during the draw period, the loan balance will not decrease.
  • In Texas, the maximum CLTV available is 80% on owner occupied properties. Additional restrictions apply in Texas, so please ask a representative for details.
  • In all other states, the maximum CLTV is 85% on owner occupied properties and second homes. Additional restrictions or requirements may apply based on application characteristics.
  • Property type of Condo has a maximum CLTV of 80%.
  • The maximum CLTV available is dependent on credit qualification.
  • Rates vary depending on owner occupancy and CLTV and other loan criteria.

Minimum Loan Amount Requirements in all States:

  • For an owner occupied property or second home the minimum loan amount is $25,000 and the maximum amount is $500,000 with a CLTV of 85% or less of the fair market value.

Other terms and conditions apply; call 844-918-4307 to speak with a representative for details. All rates and offers are subject to change without notice. To receive advertised product, you must become a member of PenFed.

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This credit union is federally insured by the National Credit Union Administration. Rates are current as of September 2023 unless otherwise noted and are subject to change.

APY = Annual Percentage Yield
APR = Annual Percentage Rate


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You are leaving PenFed.org and entering a third party Website that is not a part of Pentagon Federal Credit Union.


The content you are about to view is produced by a third party unaffiliated to Pentagon Federal Credit Union. PenFed takes no responsibility for the content of the page.


IMPORTANT NOTICE

You are leaving PenFed.org and entering a third party site. PenFed Realty, LLC is wholly owned by PenFed and this referral may provide PenFed a financial or other benefit.


For more information about the relationship between PenFed and PenFed Realty, LLC, see the Affiliate Business Arrangement Disclosure.


IMPORTANT NOTICE

You are leaving PenFed.org and entering a third party Website.


The content you are about to view is produced by a third party website that is unaffiliated to Pentagon Federal Credit Union. PenFed takes no responsibility for the content of the page.


IMPORTANT NOTICE

You are leaving PenFed.org and entering a third party site. PenFed Title, LLC is wholly owned by PenFed and this referral may provide PenFed a financial or other benefit.


For more information about the relationship between PenFed and PenFed Title, LLC, see the Affiliate Business Arrangement Disclosure.


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