The impact of a home appraisal on your mortgage loan.
A home appraisal determines what your home is worth in the current market. This fair market value will determine how much equity you have in your home, and the amount that lenders are willing to lend on your home. Appraisals are not just for home purchases, your lender may request one for your refinance mortgage loan as well.
What is the home appraisal process?
Your lender will ask a state-licensed and lender-approved professional to assess your home and determine its fair market value. The report submitted by the appraiser will tell the lender if the property value supports the requested loan amount, and can affect the amount that they are willing to lend.
The appraisal report will contain information such as the home’s legal description, size, shape, age, and condition. The appraiser will perform a complete visual inspection of the home’s interior and exterior areas, inspect the neighborhood, and inspect comparable sales on the street.
The inspection of comparable sales, or “comps” will help the appraiser to see how your home compares to other homes in your neighborhood that have recently sold. Your home value may be adjusted higher or lower than the other comparable homes depending on how it matches. Swimming pools or additional rooms at your home may bring additional value to your home if the comparable did not have them.
We have the answers to your appraisal questions. If you want to know whether your loan will require an appraisal, what to expect during the appraisal process, or whether certain features of your home will be counted towards your value, ask us. There are no questions too small for our loan advisors at Professional Mortgage Associates.