Knob and tube was phased out around 1940 or so. If it’s in good condition it’s not inherently dangerous (the house has survived this long, hasn’t it?). It can be hazardous to folks working in the crawlspace, tho. We have a 1929 rental unit that had been remodeled a few times but still had some live knob and tube wiring, and several years ago a pipe broke loose and made contact, and boy that sure caused some excitement. After that we had an electrician go through and replace all the knob and tube with modern grounded electrical.
Understand, the lender does not look at the physical inspection report. They do review the appraisal. Homes with cracked slabs are not insurable and thus the lender will not originate a loan. The same is not true for wiring unless it is something noted and commented on by the appraiser.
Once again, items that can be remedied should not prevent someone from buying a home unless the price is prohibitive…
We all have our own thresholds as to what “prohibitive” is.
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