This is part of an ongoing blog series in which we answer some of the most frequently asked questions among home buyers. Today’s question: Is a home inspection required when getting a mortgage loan in Washington State?
The short answer is no, a home inspection is generally not required when applying for a home loan in Washington.
A property appraisal, on the other hand, is almost always required when a mortgage loan is used to buy a house. Banks and lenders rely on professional appraisals to determine the market value of the house, before finalizing and funding the loan.
Home Inspections Optional in Washington State
Many home buyers in Washington pay for a comprehensive home inspection before purchasing a house. It’s a wise investment, especially when you consider how much is on the line during a real estate transaction.
But what is a home inspection exactly?
In Washington state, home inspections are not required for a mortgage loan. But they’re still a worthwhile investment because they shed light on the true condition of the property.
The average home buyer does not have the training or expertise to fully evaluate the condition of a house. That’s where home inspectors come into the picture. These individuals receive specialized training to evaluate residential real estate and to identify potential issues and items needing repair.
Appraisals Are Usually Required for a Mortgage Loan
While a home inspection might not be required for you to obtain a mortgage loan, a property appraisal probably will be.
Appraisals and inspections are to different things, though they are commonly confused as being the same. Here’s the difference:
- Inspection: The primary purpose of a home inspection is to evaluate the condition of the house and the functionality of all installed systems. The results are delivered to the home buyers, so they can make a more informed decision about the purchase of the property. Inspectors are not concerned with the value of the home.
- Appraisal: The primary objective of a home appraisal is to determine the current market value of the house, based on recent sales activity in the area. The home appraiser is concerned with the condition of the property only as it relates to the market value. His main goal is to determine how much the house is worth in the current market.
In Washington state, home appraisals are almost always required when a mortgage loan is used to buy a house. The lender wants to ensure that the house is worth the amount the buyer has agreed to pay. Since the home is being used as collateral for the loan, the property value must justify the loan amount. And that’s the purpose of the home appraisal.
The FHA loan program is a little different. The Department of Housing and Urban Development (HUD) requires all FHA borrowers to have a home appraisal when buying a house with an FHA loan. But they do not require an inspection. With that being said, the FHA appraiser will review the condition of the property to ensure that it meets HUD’s minimum criteria. Learn more about FHA inspections.
Have questions or need a mortgage loan?
Sammamish Mortgage is a local, family-owned company based in Bellevue, Washington. We serve the entire state, as well as the broader Pacific Northwest region. Please contact us if you have mortgage-related questions.