happy african american woman reading home inspection report in rapid cityDo you feel like the mortgage industry has a language all its own? You’re not alone. Surveys show that many consumers get frustrated with all of the unfamiliar terms, acronyms and phrases that are part of the mortgage application process. Here are some of the most common (and confusing!) mortgage-related terms, explained:


FHA is short for the Federal Housing Administration, an agency that is a popular source of low-down-payment home loans. VA is short for Veterans Affairs, an agency that has a popular home buying program for military personnel and veterans. The USDA — the U.S. Department of Agriculture — also has a low-down-payment home loan buying program. These agencies aren’t actually providing loans to home buyers with minimal or no down payments; they are providing guarantees to encourage private lenders to do so. Ever heard the term ‘conventional’ loan? That’s simply a loan made without a government incentive.


If you’re shopping for a home, you’ll want to be pre-approved for a mortgage loan before making an offer. Pre-approval demonstrates to a home seller that you may take out a loan up to a certain amount based on your income, credit score and debt load. Pre-qualification is a much more cursory check by a lender and doesn’t mean you’ll actually get approved for a home loan.


This acronym is short for principal, interest, taxes and insurance. These four things combined will make up all or most of your monthly housing payment.

Closing costs.

These are costs associated with the transfer of a property from one owner to another. Closing costs do not include the purchase price of the property but do include the cost of an appraisal, the buyer’s credit report fee, the cost of a title search, title insurance, recording and processing fees and other fees. Buyers and sellers typically each pay a portion of the overall closing costs. Sellers, for example, customarily pay the commissions of the real estate agents involved in the sale. Closing costs also are called ‘settlement’ costs.

Loan estimate (formerly the Good Faith Estimate).

This is a federally-mandated form that provides you with basic information about the terms of a mortgage loan for which you have applied and estimated costs in acquiring the loan.

Closing Disclosure (formerly the Truth in Lending statement).

This form details all costs associated with making and closing a home loan. You’ll find your loan’s APR, or annual percentage rate, here. Is your APR higher than the rate quoted by your mortgage company? It’s okay. It’s typically higher because the APR takes into account not only the mortgage rate, but other costs associated with the loan you’re responsible for, such as origination fees and discount points.

Origination fee.

This is a fee paid to a lender for processing your home loan. It’s typically paid in the form of up to 1 percent of your total loan amount. Don’t confuse this fee with discount points. Each discount point, equal to 1 percent of the total loan amount, can be paid to lower your interest rate. The more points you pay, the lower your interest rate.

Amortization Schedule.

This handy document shows how much principal and interest is applied to each payment and illustrates the payoff process over the life of your loan.

If you are buying a home in Rapid City or the Black Hills give us a call or schedule your home inspection online.

Take a look at a sample report or read our latest reviews.

Beautiful Custom Kitchen Design Drawing and Gradated Photo Combination.New car smell is divine, but the smell of a newly-built home might be even better. Pristine carpets, freshly painted walls, the scent of freshly-cut lumber lingering in the air — it’s hard to beat the excitement of taking ownership of a brand new property.

Everything looks great, and you have been involved in the construction process every step of the way. Why, then, would you need a home inspection? There are several reasons.

The biggest one: New doesn’t mean perfect. Building a home is a massive undertaking much like fitting together a big jigsaw puzzle. It involves many different types of subcontractors, from plumbers and roofers to HVAC technicians and electricians. Mistakes can happen in any of these areas. And while builders and municipalities have their own inspections, it’s not unusual for issues to go unnoticed. And city inspectors are looking only to see if a home meets code — minimum building standards set by the city in which the home is being built. That’s not the same as a thorough inspection. And even the best builders can miss problems.

Ideally, you’ll have your home inspected twice — once before the walls are closed and again, after the home is complete. An inspection before the walls are closed is a great opportunity to see portions of the home that aren’t normally visible or accessible. Both inspections should be performed before you take possession of the home, so that the builder can address them prior to you moving in.

Some defects are more serious than others, of course. Foundation cracks and improper grading of the property, for example, can lead to costly problems down the line. Electrical problems can pose a serious safety threat. Plumbing problems can be a serious headache as well, and absolutely no one wants to find out their air HVAC system has issues when the time comes to cool or heat your home.

Whether you’re purchasing a new or existing home, an inspection is an important step in the home buying process. To learn more about having a property inspected, give us a call at 1-605-490-2916.  Easily schedule your home inspection online.  Check out a sample home inspection report and see our latest reviews.

Couple Celebrating Moving Into New Home in rapid city after a home inspectionYour down payment is in the bank and you’re pre-approved for a mortgage. You’re all ready to start looking at homes. Here are some tips for home buying the smart way:

Don’t go it alone

Some tech-savvy buyers like to use the Internet and mobile apps to search for homes. That’s great — the Internet is a great tool for finding homes you want to look at in person. But there is no substitute to also having someone by your side who can help you navigate the home buying process. Buying a home could be the biggest purchase you ever make, and consulting an expert can make all the difference. That’s why even though most home buyers today use the Internet at some point in the home buying process, nearly 90% of all home buyers work with a real estate agent. Your real estate agent can help guide you through the home search, help you make an offer, assist you with negotiating with the seller and other parts of the home-buying process.

Don’t be swayed by staging

You found a home that looks like it could be featured in a magazine. But don’t be swayed by expensive furniture and decor. Pay close attention to the basics — the condition of the roof, the heating and cooling system, and plumbing — anything that would be costly to upgrade or repair. Those are the things that really matter and could be hard on your finances if they aren’t in good condition.

Never skip a home inspection

Many home buyers who skip home inspections regret it later. Don’t be rushed into purchasing a home. Take your time so that you can truly find the home that’s right for you and your family and have it inspected by a knowledgeable, reputable and independent third party. (That’s us!)

Want to learn more about the importance of a home inspection? Give us a call! 1-605-490-2916.  Schedule your home inspection online.  Follow  us on facebook and instagram.


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One of the most popular activities for people during the pandemic has been refreshing their homes. When you’re stuck inside with nowhere to go, it only makes sense. During the beginning of the pandemic, getting the supplies you needed for renovations was difficult. We’ve finally hit a point where most things are back in stock, and at a reasonable place. With new COVID variants coming out frequently, there’s still reason to start renovating your home. If you’re considering renovations, here are some tips on how to get things done efficiently and effectively, brought to you by Red Horse Home Inspection.

Plan Your Renovations Around Creating a Healthier Space

As we’re spending more and more time indoors, it’s important that you make your home into a healthier space. Many home renovations have included converting spaces into fitness areas, allowing people to stay home to work out.

Another health-conscious decision you can make is creating a dedicated home workspace. By doing so, you can help to separate work life from home life, creating a healthier balance when you’re forced to work from home. The distinction between the two spaces is significant.

Know What Jobs You Can Do, and What Jobs Need a Professional

It’s important not to dive into the deep end when you’re doing home renovations. Many jobs are able to be done on a DIY basis, but some are going to require the assistance of professionals. Let’s take a look at both categories.

Some DIY Home Renovations

There are a ton of DIY home renovations that just about any homeowner can do. Some of the most popular include:

  • Painting. Painting both inside and outside surfaces can be done by anyone. Just make sure that you thoroughly prep the surfaces. This helps the paint stick.
  • Refresh cabinets. Replacing cabinets is a big job that requires a professional touch. If you like your cabinets, but want to update them a bit, replace hinges and knobs. This updates their look without doing a full replacement.
  • Update your ceilings. By adding simple tongue-and-groove boards to your ceilings, you can change the look of any room, and make them visually intriguing.

Jobs That Need a Professional Touch

Some jobs just aren’t suitable for a DIY approach. These common jobs should be left to the professionals:

  • Replacing bathroom fixtures. Any job that requires modifying the plumbing should be left to, you guess it, a plumber.
  • Changing light fixtures. Similar to plumbing jobs, electrical jobs should be left to electricians.
  • Structural updates. Everyone loves an open floor plan. You can’t just go knocking down walls, though. Professionals need to make sure that walls aren’t load-bearing, something that most homeowners aren’t experienced enough to do.

Financing Your Renovations

When you’re making significant updates to your home, you’re probably going to have to dip into your savings. If that’s not an option, you may be able to refinance your home to free up some cash. A cash-out refi replaces your existing mortgage with a new loan for a larger amount. The difference between the loan amounts are what you, the borrower, receives to renovate your home with.

Update Your Space

Updating your home is going to add value to it, of course. However, you should also remember that it’s going to enrich your life. We’re spending a lot of time in our homes, thanks to the pandemic. Renovations can help you enjoy yours again!




by Nick Gromicko, CMI® and Kenton Shepard

Kickout flashing, also known as diverter flashing, is a special type of flashing that diverts rainwater away from the cladding and into the gutter. When installed properly, they provide excellent protection against the penetration of water into the building envelope.  proper kickout flashing from home inspection in sturgis sd
Several factors can lead to rainwater intrusion, but a missing kickout flashing, in particular, often results in concentrated areas of water accumulation and potentially severe damage to exterior walls. InterNACHI inspectors should make sure that kickouts are present where they are needed and that they are installed correctly. Water penetration into the cladding can occasionally be observed on the exterior wall in the form of vertical water stains, although inspectors should not rely on visual identification. There may be severe damage with little or no visible evidence.
Inspectors may observe the following problems associated with kickout flashing:
The kickout was never installed.
  • The need for kickout flashing developed fairly recently and the builder may not have been aware that one was required. The increased amount of insulation and building wrap that is used in modern construction makes buildings less breathable and more likely to sustain water damage. Kickout flashing prevents rainwater from being absorbed into the wall and is more essential than ever.
The following are locations where kickout flashing is critical:
  • anywhere a roof and exterior wall intersect, where the wall continues past the lower roof-edge and gutter. If a kickout flashing is absent in this location, large amounts of water may miss the gutter, penetrate the siding, and become trapped inside the wall; and
  • where gutters terminate at the side of a chimney.

The kickout was improperly installed.missing kickout flashing from home inspection in sturgis sd

  • The bottom seam of the flashing must be watertight. If it is not, water will leak through the seam and may penetrate the cladding.
  • The angle of the diverter should never be less than 110 degrees.

The kick-out was modified by the homeowner.

  • Homeowners who do not understand the importance of kickouts may choose to alter them because they are unsightly. A common way this is done is to shorten their height to less than the standard six inches (although some manufacturers permit four inches), which will greatly reduce their effectiveness. Kickout flashings should be the same height as the side wall flashings.
  • Homeowners may also make kickout flashings less conspicuous by cutting them flush with the wall.In summary, kickout flashing should be present and properly installed in order to direct rainwater away from the cladding.  This article if from InterNACHI and can be found at https://www.nachi.org/kick-out-flashing.htm.

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