Home Inspection and Insurance Decisions Before Mortgage Closing
This guide presents selected U.S. government consumer education from CFPB. References to “we” or “us” in the source material refer to the issuing agency. Source dates and links appear below.
Schedule a home inspection
Once you’ve chosen a home, schedule a home inspection appointment as soon as possible. You want to have plenty of time to resolve problems.
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What to do now
Find a home inspector
Choose an inspector with a reputation for being honest and thorough. You want someone to give you a complete and honest assessment of the physical condition of the home.
Schedule an independent inspection for the home as soon as possible
You want to know as soon as possible if there are major problems with the home so you can decide whether you still want to buy the home. Also, if additional inspections are needed, you’ll want to have plenty of time to get them completed.
You want an independent home inspector who is accountable to you and gives you a complete inspection and an honest opinion. If the home inspector is being paid by someone else or not paid until closing, the inspector might underemphasize problems with the home.
What to know
A home inspection is different than an appraisal, but you generally need both
When you borrow money to buy a home, your lender generally requires a form of an appraisal. Your lender must send you a copy of your appraisal promptly once it is completed. Get more information about appraisals and what to do if an appraisal comes in below the sales price.
You may be able to negotiate with the seller or cancel the sale based on the inspection
If repairs are needed, you may want to negotiate with the seller about who should make or pay for the repairs. Depending on the terms of your purchase contract and local market conditions, the seller may or may not agree to pay for the repairs. If your purchase contract is contingent on a satisfactory inspection, you have the right to cancel the sale without penalty if you are not satisfied with the results of the inspection.
If the inspection or appraisal identifies major repairs that are needed, closing could get more complicated
Some loan programs might require the property to meet specified standards. The appraisal could say the property is subject to repairs, to meet the program’s requirements. If major repairs (like a new roof) are needed, the lender can require that the repairs be made before closing, as a condition of getting the loan. Or the lender could ask you to put enough money in a special account to pay for the repair immediately after closing.
Attend the home inspection if you can
Being present during the inspection makes it easier to interpret the inspection report, understand issues, and allow you to ask questions.
How to avoid pitfalls
Don’t buy a home without having it thoroughly inspected
Inspections are for your protection.
- If there are serious flaws, such as a cracked foundation, you may decide that you don’t want to buy this home after all. If your purchase contract is contingent on a satisfactory inspection, you should be able to cancel the sale without penalty.
- If there are parts of the home that are damaged or worn out, you may want to negotiate with the seller to have these fixed before you move in, or to give you a credit for the cost of the repairs.
Don’t choose a home inspector without checking their history
Depending on your area, home inspectors may not be required to be licensed. Before choosing an inspector, ask for references from prior customers and look up the inspector with your local Better Business Bureau (BBB) and your state or county licensing authority.
Visit our sources page to learn more about the facts and numbers we reference.
The process and forms described on this page reflect mortgage regulations that apply to most mortgages.
Shop for homeowner's insurance
Homeowner’s insurance protects you in case of accidental damage to your home.
Lenders typically also require you to have homeowner’s insurance as a condition of your loan. You can choose your homeowner’s insurance company.
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What to do now
Shop for homeowner’s insurance
Contact several companies to get quotes in writing. Compare the cost and coverage amounts. See how your premium changes if you increase or decrease the deductible.
Share your homeowner’s insurance quotes with your loan officer
Show your loan officer one or more quotes you are considering, and ask if they meet the lender’s requirements for homeowner’s insurance coverage.
Choose a homeowner’s insurance company and policy
Send the final information to your loan officer.
Determine if you need flood insurance
Homeowner’s insurance typically does not cover damage from floods, so you’ll need separate flood insurance policy if that’s a risk to the home you are buying. Flooding causes $8 billion in damages in the United States in an average year. Learn more about flood insurance at FloodSmart.gov and how disaster risks could impact you.
What to know
What influences the cost of homeowner’s insurance?
- The coverage amount and cost to rebuild
- The disaster risk of the area where the property is located
- Property characteristics (such as size, condition, type of roof, electrical, year built, building code, disaster mitigation features)
- The deductible amount (the amount you are responsible for before a claim is paid)
- Previous history of claims by you or on the property
If you’re buying a condo or co-op, homeowner’s insurance may be more complicated
When you’re buying into a multi-unit building, fees paid to your condominium association or co-op board usually include master insurance for the common areas of the building. Still, you need your own insurance for your unit.
Visit our sources page to learn more about the facts and numbers we reference.
The process and forms described on this page reflect mortgage regulations that apply to most mortgages.
Sources and publication details
- Schedule a home inspection — CFPB; accessed October 28, 2026.
- Shop for homeowner's insurance — CFPB; accessed October 28, 2026.
The federal agency source text is U.S. government work in the public domain. Fynoptic selected, adapted, and formatted it for this guide. No agency endorsement is implied. Follow the linked sources for current program details and the rules applicable to your circumstances.