How to Overcome Home Repair Obstacles When Getting a Mortgage - Investigate, Inspect, Innovate

Written by Posted On Monday, 27 September 2021 00:00

Lily Tomlin  “The road to success is always under construction.”

Are you preparing to get a mortgage on a home you are about to buy or refinance?  If the mortgage company requires an appraisal on the house, it is good to investigate, inspect, and innovate if needed before spending your money on the appraisal. For example, what needed repairs can you see with the home?  Will the seller agree to pay for getting all the repairs completed?  How much will you need to pay for the repairs? 


The home condition can create obstacles to getting the value needed or getting approval from the mortgage company’s underwriting department. For example, appraisers notate repairs that affect the structure, security, and sanitation of the home. Mortgage companies require these types of repairs to be completed before closing.


Repairs that affect the structure include rotted wood; foundation problems; roof leaks or missing shingles; peeling paint (especially if the home was built prior to 1978); broken siding; electrical, plumbing, or heating problems; or issues with the air and duct systems.  

Repairs affecting the security of the home include doors that do not operate correctly, broken locks, or open access to the house from outside. 

Repairs pertaining to the home's sanitation include drainage problems, faulty water supply, septic issues; mold; and more.

Most underwriters want the trouble areas corrected before closing, but there are some workarounds when items can be fixed after closing, too.


When the repairs must be fixed before closing, the buyer and seller negotiate who will pay for which repairs. If the buyer pays, the mortgage company will have to verify in the borrower’s asset accounts that they have the funds to cover closing and repair costs. If the seller pays, then he or she cannot pay the buyer with a “repair allowance.” Most traditional mortgage programs no longer allow repair allowances or “carpet and paint allowances.” 

In cases like this, the seller could put the money in escrow to be paid to the repair vendor after closing. Some loan programs require the seller to pay one-and-a-half times the amount of the contractor’s bid into the repair escrow account. The extra fifty percent is simply a cushion to make sure, if the repair bill ended up higher than estimated, the seller would have the money to complete repairs. If unused, the extra fifty percent can be paid back to the seller when all the work is complete.

Should weather prevent the job’s completion before closing, the mortgage underwriting guidelines permit certain repair items to be completed after closing. These include landscaping and outdoor painting. In addition, in some locations, the mortgage company can allow the heating and air conditioning to be installed after closing to prevent them from being stolen before the new homeowners move into the property. 

Martin and Maria Miller

Call on resources to repair and get the second home they need

Martin and Maria moved more than a thousand miles from the place where they had lived and built a life with their children. After the kids were older, the couple had an opportunity to take over a business on the other side of the country, and they took it. Later, their children got jobs in different areas of the country. The Martins yearned to have a central rallying place where their family could get together for the holidays and gatherings.

A close family friend from their hometown knew of their desire for a second home in the old neighborhood. This close friend set them up with a realtor who found them a house close to where they once lived. It was beaten up and needed a good cleaning, some carpentry, and a bit of new sheetrock.

Halfway through the loan process, the appraisal came in with a mile-long list of items that could affect the structure, safety, and sanitation on the house. Due to the types of repairs needed, the lender required these repairs to be completed BEFORE closing. 

The Millers realized with a sinking feeling that they had just spent hundreds of dollars on an appraisal and now seemed to be in a catch-22. They could not close on the home until repairs were done, but the seller did not have the money for repairs until after the closing. In so many cases, this is where the bargain deal dies. 

Nevertheless, good friends can be valuable, especially when their trade is fixing and building houses. Their hometown friend got the list of needed repairs and whistled up his construction buddies. Everyone agreed to work for just about free just to help the Millers.  

They put together an itemized agreement to start work when the loan was approved for all but the repairs. The seller signed the agreement that he would pay the hometown friend and his pals on closing day when he got the funds. Once the loan was preapproved by the lender’s underwriter, hometown friend and his pals went to work. The appraiser went back to the house to verify the completed repairs so the Millers could quickly close on their home, where they and the rest of their family could gather together in their former hometown … all thanks to their good-hearted hometown friend … whom they now looked forward to having over for their celebratory dinner!

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Jo Garner

“Whatever YOUR personal priorities are, my job is to help you get the mortgage terms that will give you bragging rights when you talk about it and help you score on hitting your goals.”

As a mortgage loan officer, my job is to help you get to the benefits you want from your financing terms. What is most important to you? I can help you find the financing terms that will help you get to what you want.  What is your comfort level on a house payment? How much are you comfortable paying down,? What type of financing do you need to get the house you want to buy or refinance?

Different clients have different priorities in life—some are buying their first home with very little down payment funds. Some are recovering from medical challenges, divorces or preparing to send children to college and some are embarking on a long term goal of buying properties to build rental income.”

Jo Garner is a mortgage officer with extensive knowledge in tailoring mortgages to her customers who are refinancing or purchasing homes all over the country. She offers conventional, FHA, VA or other loan programs for refinancing and purchases.

Jo can help you look at rent vs buy, when it makes sense to refinance, how to get the best deal on your home purchase financing.  

Jo Garner has been in the real estate/financing business for over 25 years.  She got her start in Portland, Maine where she first began her real estate career. She received her real estate education from the University of Southern Maine and was personally mentored in San Diego, California by Robert G. Allen, author of Nothing Down, Creating Wealth and The Challenge

On moving back to West Tennessee in 1987, she went into business buying and selling discounted owner-financed notes secured on real estate.  In 1990 Jo went to work for a residential mortgage company and has been a mortgage loan officer for over 25 years.  Her goal is to offer excellent, affordable service to her customers, tailoring the loan programs to the specific needs of her clients.  

In addition to her work in the mortgage field, Jo Garner is the primary sponsor and founder of Talk Shoppe in Memphis. Jo Garner also host the radio show Real Estate Mortgage Shoppe airing on News Radio AM 600 WREC and iHeart Radio with podcasts and show notes published on

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