When it comes to shopping for a home, not only do you need to find qualities that you like, but it also has to be approved by your lender if you are getting a home loan. If there are problems with the home, there are many things the lender will consider before deciding whether or not the home is suitable for an approved loan. For example, if you have poor credit, a lender may not approve you for a home that has a significant amount of home damage since they know that you may not be in the financial state to make the repairs necessary to make the home safe. Here are four types of homes to be wary of when you start shopping:
- High-Rise Homes: Getting approved for a high-rise home can be challenging because there are many considerations that need to be made as far as the construction of the building. A lender may require a higher down payment on this type of home for this reason. If you know that you cannot afford a high down payment, consider other home options.
- Over Public Places: If you are looking for a condo that sits atop a place of business, this poses other problems for the lender. This is because you won't have full control over certain safety aspects of your home. For example, if a fire starts in the restaurant below you, which is highly likely where food is being made, it puts the lender at risk.
- Newly Built Home: Of course, a newly built home looks good in the eyes of a lender because of the fact that it likely won't suffer from major damages in the near future. However, it also poses a risk depending on the type of buyer you are. For example, if you have poor credit, it indicates that you may not be responsible to care for the home as you should. If this is the case, you could either be denied or you will be asked for a larger down payment on the loan.
- Being Close to the Ocean: Being close to the ocean is also something that lenders consider risky because of the corrosion that occurs, as well as flooding. If you are looking at homes close to the ocean, you should be ready to put down a larger down payment. You should also have a good credit score that significantly improves your chances of getting approved for this type of home.
When you know the four types of homes that are difficult to get a loan for, you know what homes you should avoid looking at, or, at the very least, be prepared to pay more for upfront. For more information, contact companies like Coldwell Banker Pro West.