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Before and After Moving Day
Soon after final settlement you will move into your new home. Before you move in,
you should check the house carefully to be sure that it is in good condition,
and that the builder or seller has completed everything called for in the contract.
For additional information on some of the things you should look for, see part 2.
If you are buying a new house, you may make an agreement with the builder to
move in before all outside work is completed. For example, the builder may
not be able to complete the driveway or walks because of cold weather. In
such cases, however, it is important that you have a clear understandingin
writing that any uncompleted work of this sort will be completed properly by a
specified date or within a reasonable time thereafter. It is usually desirable
to check with your lender, or with the VA office.
When you first move into a house, you may have to do a certain amount of
touching up, some of which may be the result of your moving in. After that,
if you have a new house, your maintenance expenses should be very little for the
first 2 or 3 years.
You should obtain from your builder or seller copies of the manufacturer's
warranties on any mechanical or electrical equipment included in the home
(heating plant, water heater, refrigerator, range, washing machine,
dishwasher, etc.), together with information as to whom to call in
case the equipment needs to be serviced. Read and carry out any instructions that
may be supplied to you on how to use and maintain each piece of equipment
properly.
In general, once you buy your home you will have to pay for future repairs
and upkeep, such as outside and inside painting and decorating, and
maintenance of the heating system and other equipment. However, when
you buy a new home you will be given a warranty by the builder. In
the warranty, the builder certifies that the dwelling is constructed
in substantial conformity with the plans and specifications on which
VA has based the valuation of your home. It is effective for 1 year
after the date you get title to your home or move into it, whichever
occurs first. If the completion of any work was delayed by conditions
beyond the builder's control; i.e., concrete walks which could not be
installed because of freezing temperatures, the lyear warranty on such
work extends for 1 year from the date of its completion. The warranty
applies only with respect to instances of substantial nonconformity with approved
plans and specifications and only if you give the warrantor notice of them in
writing before the lapse of the warranty's effective date.
If you buy a new home that is less than 1 year old, has never been occupied before,
and was not inspected by either VA or FHA during construction, VA will ordinarily
require that the builder provide you with an insured 1-year protection plan on the
property. The protection plan must provide for (a) an insurancebacked warranty
against defects caused by faulty workmanship and/or defective materials during
the first year; (b) an insurancebacked warranty of the wiring, piping and duct
work of the electrical, plumbing, heating, and cooling systems during the 2nd
year; and (c) direct insurance coverage against structural defects which
seriously affect livability from the 3rd through the 10th year.
If at all possible, you should get the builder's agreement in writing as
to what the builder is willing to do to correct defects. Many builders of
new houses usually assume responsibility during the first month or two
after you move in for certain items needing correction in new homes.
Some of these items may be: cracks in the masonry work; opening or
spreading of woodwork joints; improper operation of doors, cabinets,
and windows; water leaks at windows or doors; exterior paint blistering
or peeling; settlement of ground around your foundation; tile in your
bathroom or kitchen cracking or pulling away from the tub or sink;
dampness, as distinguished from actual water, developing in your basement;
and excessive floor shrinkage or swelling.
In all cases where you find flaws which need attention, you should notify
the builder or manufacturer and allow a reasonable period of time to make
any needed corrections. You should expect friendly cooperation from the
builder and in turn you should take the same attitude. It may hurt your
own interests to ask for any work or repairs to which you clearly are
not entitled, as it may affect the builder's readiness to do the things
to which you are entitled or which may be of the borderline variety. If
you feel that your home has defects which the builder should take care
of, and you have not received a response to your requests that they be
corrected, you may write in detail about these items to the Loan Guaranty
Officer of the local VA regional office. The VA office will review your
protests and advise you regarding any assistance they are in a position
to give you. Remember, however, that VA is neither authorized nor permitted
to guarantee that you will be completely satisfied with your home, or that
any specific defect will be corrected.
As an additional safeguard for new construction, VA may pay or otherwise
compensate for the correction of structural defects seriously affecting
livability which develop within 4 years of the time a home loan is guaranteed
or made. The assistance may be requested in the same manner as defects reported
when a builder has failed to respond to a request for correction. There is no
form to complete and a detailed letter to the Loan Guaranty Officer of the VA
regional office or center will he efficient.
A frequent problem encountered by new homeowners is standing water on some part
of the lot after a rainfall or watering. This should ordinarily be resolved by
finished grading which is intended to provide diversion of water away from the
building and from the lot by intercepting the water into lot line swales (low
lying land). Frequently the swales not only carry the drainage from your
property, but also intercept and carry the drainage from adjacent higher
properties. Care must be exercise in making additional improvements on
your property so that the grading and drainage pattern is not changed or
interrupted by plantings, walls, or other obstructions.
If you buy a house which has been previously occupied, there is usually no action
you can take against the seller to have defects corrected unless there has been
misrepresentation by the seller. That makes it even more important to be sure
that the house is in proper condition before you buy.
Remember, you are obtaining a loan from a private lender which must be repaid
just as you must repay any money you borrow. The VA guaranty, which protects
the lender against loss, encourages the lender to make a loan with terms favorable
to the veteran. But if you fail to make the payments, you may lose your home
through foreclosure, and you and your family would probably lose all the time
and money you had invested in it.
Furthermore, if the lender takes a loss, VA must pay the guaranty to the lender,
and the amount paid by VA must be repaid by you.
It is most important to you that you make each mortgage payment on the date it
is due. If at any time you are unable to make a payment on schedule, get in
touch with your lender immediately. The lender may be able to help you avoid
getting into Serious difficulties.
If you should decide to sell your home and the VA loan was made on or after
March 1, 1988, you may not allow someone else to assume that loan or "take
over the payments" without the prior approval of VA or your lender. Should
you fail to obtain this approval, your lender has the right to declare your
entire loan balance due and payable at once and may foreclose the mortgage
and file a claim with VA. You would be liable to VA for the amount of any
claim paid in such a situation. If you have an older VA loan and do not have
to obtain prior approval for someone t~ assume that loan, you will remain
personally liable for any claim paid in the event of loan default, unless
you obtain a release of liability from VA.
You can sell your property and avoid future liability: (1) by seeing that your VA
loan is paid in full (either by the Purchaser paying all cash or obtaining his or
her own loan); or (2) by obtaining prior approval from your lender for the
purchaser to assume your VA loan with your release from liability; or (3)
by obtaining a release of liability directly from VA if you do not have to
obtain the prior approval from your lender for an assumption.
To apply for approval of the assumption of your VA loan, contact the lender to whom
you send your monthly payments. You will receive the necessary instructions and
forms for you and the purchaser to complete and return to the lender. If the VA
loan is current and the purchaser appears to be a satisfactory credit risk and
agrees to assume your liability to VA and the lender, then the assumption may be
approved.
If the lender believes a prospective purchaser will not be able to repay your
VA loan, you may appeal this determination to the VA regional office that
processed your VA loan. That office may be able to approve the assumption.
If VA does not approve the assumption, and if you have been unable to find
another purchaser and cannot afford to continue the payments on the VA loan,
then you may apply to VA for special approval of the assumption. If special
approval is granted, you will remain secondarily liable to VA if a claim is
later paid on your loan.
If your loan was made prior to March 1, 1988, then you must apply directly to
VA for a release of liability. The process followed by VA will be similar to
that followed by a lender making a decision about the prior approval of an
assumption of a newer loan.
Selling your home and allowing someone else to assume the VA loan will not permit
you to reuse your benefit. In order to qualify for restoration of your entitlement
so that you may use it to obtain another VA loan, you must (1) sell your home and
have your VA loan paid in full, or (2) sell your home to an eligible veteran who
will assume your VA loan and substitute his or her own entitlement. Approval
of the assumption of a loan made on or after March 1, 1988, must first be
obtained from the lender, and then VA will process the substitution of
entitlement. VA can process a request for release of liability and substitution
of entitlement on an older loan at the same time.
Topics in the VA Quick Guide to Buying or Building Homes:
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