We all know that borrowers are being more closely scrutinized than ever before. What you should also keep in mind is that the property is also being examined more thoroughly than ever. Whether the mortgage is for purchase or refinance, the property must have a building permit(s) if there is evidence the property has been worked on. This is a potential deal killer that must be taken seriously and should be addressed at the beginning.
A classic example is a house that was built with an unfinished basement that is now finished. Appraisers these days will look at the county assessor records and compare it with the present condition of the property. If the information does not match, permits will be required which might be a rather odorous process. Some of the things to look out for besides the basement that is now finished are: attached garages converted to a living area, multiple bedrooms that were converted to one bedroom, and additions to the basic property footprint.
Yes, I have seen permitted work that was rougher than a boar’s ass sewed up with a logging chain and non permitted work that was flawless and met all the codes. But it does not matter. You need the permit(s). Nothing slips by today.
Smart real estate agents check this out before listing a property or having a client bid on one. Smart loan officers who care about the client (I know this is rare but there are a few) will also check this out when initially talking to a borrower about a loan.
Your comments and questions are always welcome.
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