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How Mold Can Affect Refinancing Options

by Jonathan

If you’re thinking about refinancing your home, there are steps that you can take to make the process go as smoothly as possible. One thing that you have to keep in mind is that the mortgage company will require an inspection and appraisal of your property. You should never assume that all is well. By having your own inspection done first, you can be made aware of a serious problem like a mold infestation before you begin the refinancing process. It’s smart to deal with a mold problem before you apply to refinance your home. The following information will explain why that is.


Types of Mold Infestations

Mold is natural, but it’s not something that you want in your home. There are varying degrees of mold infestations, but your goal should be to have a mold-free home prior to beginning the refinancing process. There are three main types of mold infestations:

  • Pathogenic Molds
    While these types of molds can cause infections, they usually only affect people who have suppressed immune systems. They can also pose a serious danger to pets and infants.
  • Allergenic Molds
    These types of molds cause trouble for people who suffer from conditions like asthma and allergies. Healthy folks may not be affected by the presence of these molds, but they are still a nuisance and can cause problems during the refinancing process.
  • Toxigenic Molds
    This group includes the infamous “black mold” that can be a deal-breaker during the refinancing process. The presence of this mold can stop a real estate transaction in its tracks. It is imperative to have this type of mold taken care of as quickly as possible because it can cause serious health problems.

How Does Mold Affect Property Values?

When a bank orders an inspection and appraisal of a property during the refinancing process, it does so to compare its value to the value of nearby, recently sold homes. The presence of mold can throw things for a loop in a major way. Banks don’t want to finance loans for homes that have mold in them. The presence of mold can seriously reduce the value of a property, which could cause serious problems for you during the refinancing process. It’s well worth it to have an inspection done prior to applying for home loan refinancing. If mold is found, you can pay for mold remediation services to take care of the issue.

How Mold Limits Refinancing Options

The odds of getting competitive mortgage refinancing rates for a mold-infested home are very slim. If the problem is severe enough, you may not even be able to refinance your home at all. This isn’t something that you want to find out during the refinancing application process. A good inspection will reveal the presence of serious types of mold, and you will then have the opportunity to remedy the situation before you try to refinance your home. Once the situation has been handled, you will be able to refinance your home and should have an easier time qualifying for great rates.


This guest post was contributed by Jonah Trenton of RefinanceMortgageRates.org, a consumer based organization with a goal to help homeowners avoid the many pitfalls of the current mortgage market.

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