Real NEastate: What if the house I’m buying was flooded?

Q: I am supposed to make settlement on Friday for a house that may or may not have been flooded in the hurricane. My mortgage lender said we might need to have a mortgage inspection before settlement. My walk-through is scheduled right before settlement. Should I be worried that the bank won’t give me the money for the house if it got flooded? And will it cost me anything for the inspection?

A: Prior to Hurricane Irene’s arrival, mortgage lenders were notified by the Department of Housing and Urban Development and Fannie Mae that they may require an inspection of the property — before disbursement — to determine if there was any damage to the property. This would be done for your best interest.

If your lender is requiring an inspection, it’s to determine if the property is still eligible for the loan. I was told mortgage investors might require the re-inspection even after a buyer’s walk-through. Some mortgage borrowers might not want to close if the property is damaged.

Your mortgage lender will likely send an appraiser to inspect the property if it’s decided you need an inspection. The inspections will probably apply to refinances and purchases. The usual fee from appraisers is roughly $125.

If you should need the inspection, at the very least, your settlement will probably be delayed. Get out there for a walk-through as soon as possible. Good luck!

Stacey McCarthy is a real estate agent with the McCarthy Group of Keller Williams. Her Real NEastate column appears every Wednesday on NEastPhilly.com. See others here. Read other NEast Philly columns here.

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