The Smart Home Shopper

When shopping for a home, there are quite a few things that can distract you from the important things. When you look at the home, it can be very easy to fall immediately in love with it, especially if it is a new home. More often than not, new homes are clean, decorated perfectly, and appear to be what you pictured in your dreams. If you’re not careful though, you’ll end up like many home owners who discovered defects shortly after moving in.

The smart home shopper orders a home inspector’s report or a professional engineer’s report prior to completing the purchase, as well as insure that the purchase agreement (sales contract) is subject to securing FHA-insured mortgage financing. Properties being financed with FHA-insured financing must meet HUD’s “Minimum Property Standards” and the appraiser must indicate such in his report, a copy of which you’re entitled to upon request.

When you look at your potentially new home, you’ll want to check and see if you can comfortably fit your furniture in it. A lot of newly constructed homes are configured so that the furniture will only fit in one position. Often times, this leaves a television or other device in a weird location, sometimes making your furniture nearly impossible to fit through the doors. This is something to bear in mind, as you certainly don’t want to have to buy entirely new furniture.

The smart shopper determines whether living space in the new home is comparable to the current residence from the square footage data on the property listing, as well as a quick and informal measurement of frequently used living areas (living room, bed rooms, kitchen, etc.) where most of the furniture will be situated. If the home is in the perfect neighborhood and school district but lacks a specific family room/area (like a finished basement or deck) the smart home shopper is aware of a way that space can be added and financed by FHA-insured rehab funds under the special “Streamlined K” program without delaying the closing.

Once your children start to leave home, you may want to look into getting a smaller house. The choice is entirely up to you, and what will work the best for your needs. Anytime you purchase a house though, you’ll want to think about the size of your new home and consider the future needs of your family as well. This way, you’ll have everything covered for years to come and won’t have to look into getting a new home.

The smart home shopper would have considered the pros and cons of the “empty nest” years and taken steps to obtain the type of FHA-insured financing which would permit the mortgage to be paid down to an amount low enough that there is substantial equity in later years. Under this scenario, at the age of 62 the FHA-HECM Reverse mortgage would be a viable option and could be used to make retirement a happy and worry-free time of life.

You may also want to look at any extras as well. Things like a pool and a hot tub may be a great thing to have, although you should look into the money that regular maintenance will cost you as well. There are a lot of things that may be great to have along with your home, but make sure to look at long term costs before you purchase.

The smart home shopper would negotiate a good buying price with room enough to add those amenities according to his/her own taste by incorporating them into the FHA-insured financing under the 203k mortgage program, instead of paying for them based on the seller’s taste and pricing. For example, if a $250,000 price was negotiated and accepted on a property which could reasonably be valued in the range of $275,000 to $300,000, the financing (96.5%) would be based on the larger figure or 110% of the after-improved (projected value based upon the work to be done) value and the smart home buyer would have the home and the extras.

Whenever you decide to buy a house, there is a lot of things that you’ll need to consider. Buying a home is not to be taken lightly, especially with all the things you’ll need to decide on. If you give yourself enough time and plan out your budget and the type of home you want, you’ll have plenty of time to make that very important decision. You never want to rush the process, as you could end up with a home that is less than perfect. If you take your time and look at several different houses, you’ll end up in your dream home before you know it; And you’d be able to comfortable afford the mortgage repayments. You’d be, in essence, a smart home shopper.

A message to Prime Mortgages readers:

Your support is very much appreciated. We will continue working to provide the most relevant and useful information about current FHA-insured programs and related topics. Please let us know what you think in the comments section. Thanks and God Bless!


For more about 203k, please visit the HUD website, and to find out if you qualify for 203k financing, visit a HUD-approved lender at Please send inquiries to Nick Toscano.


If the government can’t run business, how come businesses always run to the government for a bailout when it runs into trouble? FHA-insured mortgages, government run for 75 years. Lest we forget?

As of July 1, 2009 a recent housing initiative was expanded to allow Las Vegas borrowers who are up to 125% underwater on their mortgages to seek mortgage refinancing. Thanks to the Making Home Affordable program!