The condition of the house which you want to purchase is taken very seriously by the lender before offering you a loan. Problems in the house such as broken doors, leaking pipes or water stains on the walls are easily reparable and the lender does not usually stall a mortgage loan because of these minor problems. However, there are some problems related to the property which are much bigger and these problems may make the property un-mortgageable. Serious repair works are required to rectify these problems. Here we discuss about some of these problems that force the lenders not to offer loans. Lenders take these problems as serious structural defects in the house and quite obviously they refuse to offer any loan to purchase such properties. Here we discuss about some of these problems that make a property un-mortgageable -
1. Un-permitted improvements made in a house
If some un-permitted improvements have been made in a house, this will surely be caught by the appraiser at the time of property appraisal. If the square footage area given in the county recorder's office does not match with the actual square footage area, it shows up in the report of the appraiser. Lenders will not be interested to offer loans to purchase such properties due to code violations. If a bathroom is set up in a garage or if a garage is converted to a bedroom, chances are quite high that house construction rules would be violated. Access to garage is required for health and safety purposes. So, in case a garage is closed and then converted into a bed room, it will be same as violating the building codes.
2. Non-functioning bathroom or kitchen
If the house has non-functioning bathroom or kitchen, then the lenders won't be interested to offer loans to purchase such house. Again, if the house has no kitchen or bathroom at all, then also, the lender won't be willing to offer any loan.
3. Other major problems in the house
If there are serious structural problems in the house such as holes in the walls, floors or ceiling, that make the house inhabitable, then the lenders will hesitate to offer loans to purchase such properties. Instead of the mortgage loan, a construction loans will be required to fix these major faults.
4. In case the house is flipped too often
Flipping is used in the country to buy a revenue-generating asset and to resell it quickly. Flipping is often used in the real estate industry. In case the ownership of a home is changed quite often and if the is home is flipped to make profit, then the lenders may not be too interested to offer the necessary financing to purchase such home. Flippers sell the house back and forth and inflate the price of the house. Lenders generally refuse to finance the purchase of these inflated homes.
These are the housing peculiarities that make a home non-mortgageable. Due to the non-availability of necessary financing, it becomes tough to purchase such homes.