Whether you’re purchasing a new home or refinancing, your home appraisal is an important (and necessary) part of your mortgage process. So, what exactly is an appraisal? It’s an estimate of how much your home (or potential new home) is worth in today’s real estate market.
The Home Valuation Code of Conduct (HVCC) went into effect in May 2009 and prohibits lenders from having direct contact with appraisers. As a result, most lenders today work with a third-party appraisal management company within the geographic area of the home being appraised.
Appraisals typically cover all aspects of the house and are very detailed. Here’s a few of the main things that appraisers are looking for when they look at the home:
If you’re refinancing your home, here’s a few pointers to keep in mind before you have your home appraised:
After your appraisal is completed, you’ll get a Final Report of Value which lets you know the appraised value of the home. This information is important and helps guide you through one of the biggest financial decisions of your lifetime.
QUICK TIP: An appraisal is not the same as a home inspection. If you’re buying a home, you’ll need to hire an experienced home inspector to alert you of any potential problems (leaky roof, moisture in the crawl space, a questionable air conditioner, or bad plumbing) and repairs that need to be made.
This can cause some problems with your mortgage and your contract. Unless the seller agrees to lower the price of the home, you’ll have to come up with a larger down payment to get the same mortgage and interest rate.
Don’t get stressed out about this process! If you have questions about the appraisal process for your home loan or would just like to speak to one of our Home Loan Specialist, click here.