Found K&T in the inspection report? Who decides on your loan?
Three different people. A knob and tube mortgage isn’t decided in one place: the appraiser describes the house, the lender decides on the loan, and the insurer decides on the policy your lender requires. Each can raise the wiring on its own.
At Conflux Cincinnati Knob and Tube we assess and replace K&T for buyers, sellers and owners refinancing across Cincinnati, Hamilton County and Northern Kentucky. Here’s who decides what; the lender, appraiser and insurer have the final word on your loan.
| Who | What they look at | What they can do |
|---|---|---|
| Appraiser | The house’s condition against the loan program’s property standards | Note the wiring, or make the appraisal subject to repairs |
| Lender | The appraisal, the inspection and its own policies | Approve, require repairs before closing, or decline |
| Insurer | Whether K&T is present and active | Write the policy, attach conditions, or decline |
Will the appraiser flag the wiring?
Maybe. An appraiser values the house and, for many loan programs, checks it against minimum property standards. Those standards generally talk about hazards to safety, not particular wiring methods by name.
Whether knob and tube counts as a hazard is the appraiser’s call, based on what they can see. Exposed runs with damaged insulation in a basement read differently from tidy porcelain on intact wire. If the appraisal comes back “subject to” repairs, the wiring becomes a closing condition.
What about FHA and VA loans?
Government-backed programs such as FHA and VA loans apply their property standards through the appraisal. Homeowners report a VA purchase that couldn’t be approved until the K&T and open grounds the inspector found were fixed. That’s one buyer’s account; your appraiser and lender decide your case.
Will the lender make the loan?
That depends on the lender, which sets its own conditions on top of any program rules. Homeowners report asking whether a bank would make a conventional loan at all on a house wired entirely in K&T, on a 100-amp breaker panel and ungrounded.
Ask your loan officer two direct questions early, and get the answers in writing:
- Will you close on a house with active knob and tube, given this inspection report?
- If repairs are required, what proof do you want: an electrician’s letter, the permit final, or both?
Why is insurance so often the real hurdle?
Because every mortgage requires homeowners insurance in force at closing. If no carrier will write the house, your loan can’t close, whatever the lender thinks of the wiring.
That’s why the insurer so often decides. Cincinnati homeowners report being under contract and having a broker come back with no carrier for a house with K&T in the attic and basement. Our guide to K&T insurance in Ohio covers how carriers approach it.
How do you keep your closing on track?
Move in order, and fast. The inspection period is short, and everything above has to happen inside it or go into the contract. Each answer shapes the next.
- The inspection report names K&T. Note exactly what the inspector saw and where.
- Call an insurance agent the same day. Ask for the carrier’s question in its own words.
- Ask the loan officer about conditions. Get the lender’s position before the appraisal comes back.
- Book an assessment. We trace which circuits are live, which gives the insurer and lender facts instead of guesses.
- Choose your path. Seller repair, a credit, an extension, or walking away.
Our before-closing service is built around this window, and our guide to comparing rewiring quotes helps you turn a scope into a number for a credit.
Should the seller fix it, or should you take a credit?
If repairs have to happen before closing, someone does them on a house you don’t own yet. Each route has trade-offs.
| Route | Works when | Watch for |
|---|---|---|
| Seller repairs before closing | The seller agrees and there’s time | Who chooses the contractor, and how “done” is defined |
| Credit at closing, you repair after | The lender and insurer accept that order | A carrier may still want the work done first |
| Extend the closing | Everyone agrees the work needs more time | Rate locks and the seller’s own plans |
Whichever route you take, define the repair by circuit, with the paperwork insurers read: a scope letter, a circuit map, a disconnection record and the IBI permit final.
What does a scope need to say to satisfy a lender?
It has to describe the repairs in terms they can check. Vague wording such as “electrical updated” invites a second round of questions right before closing.
A scope that holds up names these things:
- The circuits. Which K&T circuits we replace, by room, and which we disconnect.
- What remains. Plainly, whether any K&T stays live after the work.
- The method. New grounded cable from the panel, or a partial replacement with a stated boundary.
- The proof. The IBI permit, the rough-in and final inspections, and photos of the disconnected ends.
- The timing. Working days, the inspection steps and patching, explained in our guide to rewiring timelines.
Where K&T runs through most of the house, the scope is usually a whole-house rewire, which gives the simplest answer to the insurer’s question.
How can you pay for the work?
Ask your lender about renovation loans, which roll repair costs into the mortgage. Separately, Hamilton County’s Home Improvement Program offers repair loans of up to $50,000 at 3% below the lowest bank rate, for owners in any Hamilton County community.
Other City and County programs are income-based and change over time. Our Cincinnati cost guide lists them with their status, and if you’re the seller, read the disclosure guide for your side of the sale.
How do you get facts in front of the people deciding?
Appraisers, lenders and insurers all decide better with specifics. A knob and tube inspection inside your inspection period gives each of them a written list of circuits and their status.
If your closing date is close, call (513) 496-2715 with the address and the date, and we’ll plan the visit around it.