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Everything to Know About Home Appraisals!

View of Wilmington North Carolina from across the river

When you’re buying, refinancing, or selling your home, a home appraisal will always be one of the key components of the transaction. Simply defined, a home appraisal is an unbiased opinion from a professional appraiser on a home’s value. Home appraisals are done to determine whether the home’s contract price is appropriate given the home’s condition, location, and features. Regardless of whether you’re a buyer, seller, or homeowner thinking about refinancing, you’ll want to understand how the appraisal affects you.

Buying a Home

When you’re in the market to buy a home, and you’re under contract, the appraisal will be one of the first steps in the closing process. If the appraisal comes in at or above the contract price, the transaction proceeds as planned. If the appraisal comes in below the contract price, however, it can either delay or derail the transaction. As the buyer, you have an advantage to negotiate with the seller to lower the price. While appraisals help buyers avoid overpaying for homes, a seller may feel that a low appraisal is inaccurate and be reluctant to drop the price, which could likely require a second appraisal.

Selling a Home

Because lenders will not approve a loan for more than a home is worth, a low appraisal for a seller would motive them to lower their home’s price to get it sold. Distressed sales in the surrounding area, also known as property/assets sold in an urgent manner, can lower a home’s appraisal value. If a seller believes that their home’s value has been dragged down by the sales prices of nearby foreclosures and short sales, they might be able to convince the appraiser that their home is worth more if it’s in significantly better condition in comparison to those properties.

Refinancing a Home

If a homeowner is refinancing a conventional mortgage, an encounter with a low appraisal can prevent them from refinancing their home. The home needs to be appraised at or above the amount the owner wants to refinance for a loan to be approved. This differs, however, with FHA mortgages, as a home owner can refinance without an appraisal through the FHA Streamline program.

Regardless of whether you are in the market to buy a home, to sell a home or to refinance, a basic understanding of how the appraisal process will help you with your homeownership goals.

6 Strategies to Get a Better Interest Rate

While market conditions obviously play a major role, there are some qualifying factors within the buyer’s control that can help secure a lower interest rate. Here are six smart strategies to consider!

5 Wise Ways to Winter-Proof Your Home

Whether you love or dread the frosty winter temperatures, we all like to save money while staying comfortable in our home when the temperatures drop. By taking a few simple steps towards winterizing your home, you can achieve both goals!

5 Tips for Choosing A Reliable Home Inspector

Doing a quick search for home inspectors in your area will come up with numerous options, but as with so many professions, some inspectors are better than others. Here are some handy tips that can assist you in your search for a reliable home inspector!

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Equal Housing Lender LogoALCOVA Mortgage LLC | NMLS#40508 | (www.nmlsconsumeraccess.org)
Licensed in AL, CO, DC, FL, GA, KY, MD, NC, OH, PA, SC, TN, TX, VA, WV | 308 Market St SE, Roanoke, VA 24011

 

 

 

 

 

 

 

 

 

 

Equal Housing Lender LogoALCOVA Mortgage LLC | NMLS#40508 | (www.nmlsconsumeraccess.org)
Licensed in AL, CO, DC, FL, GA, KY, MD, NC, OH, PA, SC, TN, TX, VA, WV | 308 Market St SE, Roanoke, VA 24011