Shopping For Your Home Loan: Hud'S Settlement Cost Booklet - U.s. Department Of Housing And Urban Development (Hud) Page 7
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48Mortgage Clause
The mortgage clause will provide whether or not your deposit will be
refunded if the sale is cancelled should you be unable to get a mortgage loan.
Your agreement could allow the purchase to be canceled if you cannot obtain
mortgage financing at or below a specific interest rate or through a specific
loan program.
Settlement Costs
You can negotiate which settlement costs you will pay and which will be
paid by the seller. The seller may contribute a lump sum amount or may agree
to pay for specific items on your behalf.
Inspections
Most buyers prefer to pay for the following inspections so that the
inspector is working for them, not the seller. You may want to include in your
sales agreement the ability to cancel the agreement or renegotiate the contract
for a lower sales price or for the needed repairs if you are not satisfied with the
inspection results.
o Home Inspection: You should have the home inspected. An
inspection should determine the condition of the plumbing,
heating, cooling and electrical systems. The structure should also
be examined to assure it is sound and to determine the condition
of the roof, siding, windows and doors. The lot should be graded
away from the house so that water does not drain toward the
house and into the basement. You should be present to ask
any questions.
o Pests: Your lender may require a certificate from a qualified
inspector stating that the home is free from termites and other
pests and pest damage. Even if your lender does not require a
pest inspection, you may want to obtain a pest inspection to
ensure the property does not have termites or other pests.
o Lead-Based Paint Hazards:
If you buy a home built before
1978, you have certain rights concerning lead-based paint and
lead poisoning hazards. The seller or sales agent must give you
the EPA pamphlet “Protect Your Family From Lead in Your Home”
(or other EPA-approved lead hazard information). The seller must
also disclose any known lead-based paint hazards in the property
through a Lead Warning Statement and give you any relevant
records or reports.
o Other Environmental Concerns: Your city or state may require
sellers to disclose known environmental hazards such as leaking
underground oil tanks, the presence of radon or asbestos, lead
water pipes, and other such hazards. You may want to determine
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