4 Property Risks That Can Impact Financing

When you apply for a mortgage, lenders assess two things: your risk as a borrower and any risks associated with the property. While you can influence the former through having a good credit score and low debt-to-income ratio, the latter requires a careful eye when shopping for your home.

Want to keep your financing opportunities open before you buy? Watching out for these potential risks during your home search can help.

Why are property risks important to look for? 

Certain home features are financially risky, and too much risk makes it harder to get approved for financing. This is true for conventional mortgages and even more so for FHA loans, which tend to have more rigid property requirements.

Here are four concerns that can cause setbacks, even for conventional financing:

An Old Roof: Roofing must have at least two years of functionality remaining to qualify for most mortgages. If the roof is too old, it’s worth asking the seller if they will update it.

Structural Issues: Homes need to be structurally sound to qualify for a conventional mortgage. Structural issues can often be hard to spot, so a third-party home inspector can help you identify any potential concerns.

Mold or Excessive Water Damage: Both are safety issues that can set your financing back. They’se are considered “adverse conditions” and will be noted on the appraisal.

Uninsurability: If a home cannot be insured due to its vulnerability to wildfires, flooding or other environmental hazards, it will likely pose problems with financing as well.

Interested in a home but not sure if it will qualify? Get in touch — together, we can find financing options that suit your needs.

About the Author

Kevin Oto

Mortgage Broker/ President at Green Haven Capital Inc. · NMLS #62641

With over 20 years of experience, Kevin has established himself as one of Northern California’s most trusted mortgage advisors — helping homebuyers, homeowners, and real estate investors secure financing with clarity, confidence, and competitive pricing in any market.

Specializes in: Conventional loans, Purchase loans, Investment property financing

Licensed in: CA, CO, MD, OR, TN, TX, UT

→ Contact → (916) 476-6507 → Verify NMLS license