Getting a Mortgage After a Natural DisasterEd Hughes, President, Mortgage Banking, Univest Bank and Trust Co.
Many homeowners were affected by Hurricane Sandy and there has been a great deal of media coverage associated with the human and emotional tolls the storm created. But how does the storm affect those people who are in the midst of, or considering, buying or refinancing a home?
When you have applied for a mortgage, your loan officer should contact you shortly after any natural disaster to tell you exactly what to expect. If the appraisal has not been completed, the lender will ask the appraiser to state in the report if there was any disaster-related damage. If an appraisal has already been completed, the lender will want to determine whether the property has incurred any damage related to the disaster after the date of the original report. This is typically accomplished by having the original appraiser drive by the property and take pictures to demonstrate the structure is intact, then complete a short summary for the lender. If the property is located in a flood zone, the lender may also seek access to the property to determine whether flooding occurred.
If you are buying a home, regardless of whether you are obtaining a loan or not, consumers should demand an inspection of the property prior to the purchase to ensure no obvious damage has occurred. Although the seller and the seller's agent are obligated to disclose such facts to you, it's worth the peace of mind to view the property yourself. Remember, any insurance you have on a home purchase does not take effect until after you settle; so if the damage occurred prior to settlement and you make a claim, it will be denied.
In the event damage has occurred, a lender will typically not fund the loan until the damage has been repaired. In many cases, lenders will assist by providing special financing to make the required improvements, provided the insurance policy/carrier confirms the damage is covered.
Univest Bank and Trust Co. is an Equal Housing Lender