Three Things to Expect From a Refinance Appraisal
If you need to refinance your home, you will need to complete the appraisal process as part of your refinancing application. A refinance appraisal is designed to estimate the true value of your home so that your lender can approve your loan amount based on the worth of your property. Learn more about what to expect from the appraisal process and what you should do if you get a low appraisal.
1. Home Visit and Inspection
In many ways, a home appraisal for refinancing is similar to a home inspection. However, the appraiser will pay special attention to the condition of the home, particularly the exterior and interior features. Important parts of your home should be in excellent condition if you want a good appraisal result, including the roof, deck, siding, floors, windows, and walls.
An appraiser may also conduct an inspection for basic health and safety standards. If you have lead paint, a poor HVAC system, or there are major hazards in the home, this can negatively impact your North Sound Valuation appraisal result.
2. Comparison to Nearby Home Values
An appraiser will also compare the value of your home to the value of other homes in your area. This is because real estate tends to fluctuate based on the value of nearby properties, so even if your home value is high, an appraiser may drop the value if other homes in your area are not valued at the same level.
3. Examination of Home Systems and Renovations
You should also expect an appraiser to examine all the major home systems and any upgrades you have made to the property. Upgrades include permanent fixtures that are intended to raise the value of the home, such as new countertops or a new porch. When examining home systems like electrical, plumbing, and HVAC systems, the appraiser will pay special attention to the age of the system, visible corrosion, and other signs that the system may not be in good condition.
What Can You Do If You Get a Low Appraisal?
If you get a low appraisal, there are a few things you can do. As a homeowner, you have the right to dispute a home appraisal by reporting errors, correcting details on your appraisal report, or even asking for a second appraisal inspection. You can also increase the value of your home by making repairs or upgrading areas that scored low on the appraisal report.
It’s important to understand that a low home appraisal doesn’t prevent you from refinancing. You have the opportunity to make improvements or consider other refinancing options, such as cash-in refinancing or refinancing that does not require home appraisals, such as federal-backed mortgages.
Refinancing your mortgage may be a good idea if you want to lower your mortgage payments. However, for some mortgages, you will need to complete a home appraisal so your lender can feel more confident about the value of your home. The appraisal process will include a thorough home inspection to assess the value of your property, and will usually include a comparison between your property and the property value of homes in your area.
