Read Before You Refinance: 5 Tips For A Higher Home Appraisal
PV Realty Advisors is a Toronto Area-based Real estate Appraisal Services & Consulting Firm providing real estate appraiser, commercial appraisal, residential property appraisal, and land appraisal services for a wide range of Commercial, Residential and Investment properties.
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If you are considering refinancing your mortgage then there are certain things you should focus on. A major part of the refinancing decision lies in the home appraisal. So, you have some home works to do. You should remember that if the appraisal value puts the home equity at lower than 20% then you have to pay private mortgage insurance or go for a cash-in refinance. Also, the interest rate may be higher as well as you will be considered a risky borrower by the lenders. So, you need to make sure that your home equity stays higher than 20% before you apply for refinancing. To ensure this you should focus on home appraisal.
A home appraisal is a professional opinion about the value of your home which is conducted by certified professionals. The residential real estate appraiser will examine the amenities, aesthetic appeal, and the overall condition of the interior and exterior of the house including the garage, garden, and pathway. They also look at the transaction reports of neighboring properties that were sold recently. This will give them an indication of the price at which your property will sell at the moment. An appraisal report from the appraiser will give the lenders an idea about the current value of the house so that they can decide how much money they should allocate for refinancing. Here are some tips for getting a higher property appraisal.
The appraisal time
It takes about 7 to 10 days to complete the appraisal. The residential home appraisers have to spend a few hours inspecting the interior and exterior of the property, measuring the square footage and other details. The residential real estate appraiser also has to compare the property with those of the neighboring properties.
Cost of appraisal
It costs about $300 to $450 to appraise a home. The cost varies depending on the size, location, and condition of the property. Usually, the residential home appraisers work on an hourly basis or for a flat fee.
Mortgage underwriting
Mortgage underwriting happens after the appraisal. The underwriter will review the loan file to ensure that everything is alright. The documents must be in place and the calculations must be clear. Analyzing all these the underwriter will assess the risks involved with the loan before making the final decision about giving the loan.
Factors lowering home appraisal
The location has a big impact on the property valuation. If your home is located in an undesirable location like near a busy street or beside a junkyard, then your property will have a low appraisal value.
Factors improving home appraisal
You should make the condition of the house better before the appraisal. For example, you can paint your property, fix the roof or tidy the house to improve the curb appeal of your property. That way you will get a better appraisal.
An appraisal is necessary before refinancing so that the lenders don’t lend more money than the property’s value. In case of a foreclosure, the lender should be able to resell the house to collect their money.