A home appraisal is a crucial step in the homebuying and refinancing process, serving several important purposes. Here's why a home appraisal is necessary:
- Buying or Selling: For homebuyers and sellers, an appraisal helps determine the fair market value of a property. This value is crucial for setting the right listing price or making an informed offer.
- Refinancing: When refinancing a mortgage, lenders want to ensure that the loan amount does not exceed the property's current value. An appraisal helps establish the property's current market worth.
- Lenders use the appraised value to assess the collateral for the mortgage. It is crucial for determining the loan amount. If the appraised value is lower than expected, it can impact the loan-to-value ratio and terms.
- Appraisers evaluate the overall condition of a property. This includes assessing the structural integrity, interior and exterior conditions, and the quality of construction. Any issues identified during the appraisal may impact the property's value.
- Appraisals are often required to comply with lending regulations. For instance, many lenders require an appraisal to ensure they are adhering to guidelines set by government-backed entities like Fannie Mae or Freddie Mac.
- In real estate transactions, the appraisal can serve as a negotiation tool. If the appraised value comes in lower than the agreed-upon purchase price, buyers may use it to negotiate a lower price. Conversely, sellers may use a higher-than-expected appraisal to justify their asking price.
- Appraisers consider various features of a property, such as the number of bedrooms and bathrooms, square footage, and the overall layout. Specific amenities, like a pool or a renovated kitchen, can also influence the appraised value.
- Lenders use appraisals as a risk management tool. By ensuring that the property's value supports the loan amount, they reduce the risk of providing loans that exceed the property's actual worth.
- Appraisals may be required for legal or tax purposes. In legal cases, such as divorce settlements or estate planning, an accurate appraisal is essential to determine equitable distribution. For tax assessments, local authorities may use appraisals to calculate property taxes.
- When homeowners apply for home equity loans or lines of credit, an appraisal determines the property's current value. This helps establish the maximum amount of credit the homeowner can access.
A home appraisal is a comprehensive assessment conducted by a licensed appraiser to determine a property's value. Whether you're buying, selling, refinancing, or accessing home equity, an appraisal plays a crucial role in ensuring a fair and accurate evaluation of the property's worth.
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NO RATIO PROGRAM
No DTI calculation
No Income on Application
No Employment on Application
No Tax Returns
No W2s
No 1099
Only Required to Have
as low as 20% Down Payment
80% LTV = 720+ FICO - 12 Months Reserves
75% LTV = 680-719 FICO - 9 Months Reserves
65% LTV = 660-679 FICO - 9 Months Reserves
Funds for Down Payment
Closing Costs
Prepaid’s
Reserves
Primary Residence
Second Home
Purchase
Refinance
Minimum Loan $200,000