When you consider 澳洲幸运5官方开奖结果体彩网:refinancing your mortgage, a lot will hinge on the appraisal. If you’re thinking about refinancing, you should understand the 澳洲幸运5官方开奖结果体彩网:appraisal’s essential role in the process and how you can prepare your💦 home, which is key to achieving a successful refinance. Tackle repairs you've been meaning to do and freshen up the look of your home, which🔯 can increase it's value.

If your appraisal value puts your 澳洲幸运5官方开奖结果体彩网:home equity at less than 20%, then you’ll get stuck paying for 澳洲幸运5官方开奖结果体彩网:private mortgage insurance (PMI) or bringing some cash to the table to do a cash-in refinance. In addition, if your home’s assessed value is so low that you’re 澳洲幸运5官方开奖结果体彩网:underwater, you can’t refinance. What’s more, you might not get the lowest 澳洲幸运5官方开奖结果体彩网:interest rate available, as lenders consider borrowers with less equity to be riskier﷽. All of these facts u🌟nderscore the importance of a successful home appraisal.

What Is a Home Appraisal?

An appraisal is a professional opinion of 澳洲幸运5官方开奖结果体彩网:your home’s value and is an important step in the homebuying process. Appraisals are conducted by licensed or certified professionals, who provide opinions as 澳洲幸运5官方开奖结果体彩网:unbiased third parties. The apꦅpraiser gets paid for valuing your home but has no skin in the game when it comes to whether you qualify for a mortgage or refinance as a r🎃esult of their estimate.

An 澳洲幸运5官方开奖结果体彩网:appraiser visits your home for about 30 minutes to a few hours to measure it💙s﷽ dimensions, examine amenities, and evaluate the overall condition inside and out, taking photos of the exterior, the garage, and every interior room.

Then, they examine the transaction records of properties similar to yours—ideally, properties in your neighborhood that have sold recently. Based on the home visit and these records, the appraiser arrives at a professional opinion of how much your property would sell for if you put it on the market. The bank uses this value, along with your income, assets, and 澳洲幸运5官方开奖结果体彩网:credit history, to determine how much it will lend you and on what terms.

Appraisal vs. Refinance Appraisal

Appraisals are also needed if you want to refinance your mortgage. As wꦍith a purchase appraisal, a refinance appraisal protects the bank by ensuring it doesn’t lend the borrower more money than the property is worth.

If the property later goes into 澳洲幸运5官方开奖结果体彩网:foreclosure for any reason, the lender wants to be able to resell the proper𝄹ty and get its money 🌊back.

How Do Home Appraisals Work?

Federal regulations dictate how lenders and appraisers must behave throughout the appraisal process. After the mid-2000s housing crisis, the U.S. government wanted to increase appraiser independence to prevent the possibility of lending based on inflated home values. The 澳洲幸运5官方开奖结果体彩网:Dodd-Frank Act and the 澳洲幸运5官方开奖结果体彩网:Truth in Lending Act are among the regulations that require appraisals and evaluations to be conducted independently, based on established criteria, and free from outside influence.

Because federal appraiser independence requirements define a narrow scope of acceptable interactions between an appraiser and loan officers, lenders are afraid that having any contact with appraisers could be construed as violating the law by attempting to influence the appraiser’s opinion before the appraisal is completed. Lenders err on the side of caution to avoid the possibility of severe disciplinary action. 澳洲幸运5官方开奖结果体彩网:Loan officers and brokers can't select the appraiser, nor can the borrower.

The lender may order the appraisal through a third party called an 澳洲幸运5官方开奖结果体彩网:appraisal management company (AMC). “Using an AMC is not a requirement, but that🎀 is the common approach to appraiser independence,” says , a branch man𝓀ager and senior loan officer at Pinnacle Home Loans.

Many lenders—especially small, local ones—have direct referral relationships with a small group of individual appraisers and may not use an AMC. Or the lender may have ꧟an in-house independent appraisal department.

Who Pays for the Appraisal?

The borrower must pay for the appraisal regardless of whether the loan closes because the appraiser still did the work. While the fee may seem worthwhile if it enables you to get the refinancing terms 🍷you want, it can seem like a waste of money if a low appraisal means you can’t refinance.

Because lenders can't discuss a home’s value or anticipated “target value” with an appraiser at the time of assignment, homeowners are not able to get an appraiser’s ballpark estimate of whether their home is likely to appraise high enough for them to refinance before they pay for the service, as they could before the new regulations. At best, you can search for recent comparable sales on websites such as Zillow and Redfin, but these records may be inaccurate or incomplete.

Another option is to ask a real estate agent to do a 澳洲幸运5官方开奖结果体彩网:comparative market analysis (CMA) and provide you with printouts of recent comparable sales from the 澳洲幸运5官方开奖结果体彩网:multiple listing service (MLS), says , an associate broker, realtor, and attorney with RE/MAX Town &ܫ; Country. Ask nicely, as the agent will be doing you a favor—unlike with a home sale, they won’t earn any commission from your refinance.

What Is the Cost of a Home Appraisal?

Appraisal fees vary by state, but appraisers must charge customary and reasonable fees for the area. Expect to pay the lender $314 to $423 to appraise a standard single-family home.

“More complex properties are more expensive because the inspection takes more ti🧸me,” says Erin Bent꧟on, vice president of Decorum Valuation Services, an appraisal management company.

What Do Appraisers Look for?

The value the appraiser gives your home largely depends on the recent sales prices of 澳洲幸运5官方开奖结果体彩网:comparable properties. All the same, you’re mistaken if you think you can’t do anything to help your home come in at t🐼he high end of its ꩲpotential appraisal value.

Getting your home appraised is similar to going on a first date🙈, says Ailion. While you have no idea how your partner will like or evaluate you, being well-groomed substantially improves your chances of being deemed attractive.

“So it is with the appraisal,” he says. “Your property should be neat and clean, uncluttered, and easy to inspect. Any pets should be contained and [any] smells masked. You don’t൲ want the appraiser to be rushed to get out.”

Here’s how certified residential appraiser , president of Vaccari & Associates, describes his approach to the job: “Generally, it should not matter if your lawn is not mowed or your house is a mess. It’s important to realize, though, that a dirty or unkempt home can increase its appearance of wear and tear beyonไd normal—and that condition can, in fact, affect value.”

According to Vaccari, the 澳洲幸运5官方开奖结果体彩网:appraiser cares about the following:

• Exterior and interior conditions
• Total room count, with value added to bedrooms and bathrooms
• Functionality, including interior room design and layout, and 澳洲幸运5官方开奖结果体彩网:functional obsolescence
• Improvements to kitchens and baths, windows, the roof, and the home’s systems (heating, electrical, and plumbing) over the previous 15 years that make the home more up-to-date, functional, and livable by today’s standards
• Condition and age of the home’s plumbing, electrical, and HVAC systems
• Exterior amenities, such as detached garages, decks, and porches. Pools and hot tubs will also add to a home’s value.
• Location
• Unappealing features, such as an exterior appearance that’s inconsistent with the rest of the neighborhood

It’s a good idea to point out features that may not be immediately apparent that could potentially ෴add to the appraiser’s opinion of value, Parsons says.

How Do I Prepare for a Refinance Appraisal?

Preparing your home for an appraiser’s visit is different from preparing it for a prospective buyer. “When you are opening your home to a prospective buyer, you want to trigger emotional responses,” Parsons says. “As a seller, you want that buyer to be able to imagine how happy and co🐻mfortable they will be there. No such subj🐈ective considerations apply to an appraisal.”

Vaccari adds that a homeowner wouldn’t make a change, such as ripping up old carpet to reveal hardwood floors, for an appraiser as they might for a seller. Still, freshening up the home’s paint, both inside aꦓnd out, can help, as can clearing away clutter to allow full access and viewing of all areas of the home, including the basement.

Be sure that everything works (e.g., run your heating and cooling systems and test your kitchen appliances), and make plans for the children and p𒉰ets to be somewhere else s👍o that they aren’t a distraction. Finally, Ailion says, “If the tax records are incorrect, point that out.”

Otherwise, Vaccari sa💮ys,🌠 it is the appraiser’s responsibility to discover problems and ask questions where warranted.

If You Secure a Good Appraisal 

Congratulations! You have completed a major step toward refinancing your mortgage and saving money. Now it’s time to go through the next steps with your loan officer. If you’ve secured a favorable appraisal, use a tool such as the to research interest rates on a refinanced mortgage for a home of your value. Being armed with these figures can give you some bargaining power when meeting your 澳洲幸运5官方开奖结果体彩网:refinance lender.

What if I Don’t Agree With My Home Appraisal?

Sometimes the appraiser’s value is lower than you would like it to be and 澳洲幸运5官方开奖结果体彩网:loౠwer than yﷺou think your home is worth. “An a💫ppraisal is just one person’s opinion,” Ailion says. “While this is a trained and educated opinion, as with all professions, there are good and bad practitioners.”

Given the strict federal regulations governing the process, can y🦂ou do anything about a low appraisal? “If the homeowner does not like the value of the appraisal, they can write a letter of appeal to the lender or AMC, but the chance of an appraiser changin𝔉g their opinion is very slim unless the homeowner has overwhelming evidence that the value is off,” Benton says.

Your appeal will only succeed if you can show that the appraiser made a significant error, such as listing the square footage or room count incorrectly; disregarding an important amenity s🐭uch as a pool or spa; or disregarding a comparable sale that might support a hig♋her value while “cherry-picking” a less suitable comparable that would indicate a lower value, Parsons says.

According to Ailion, you might also make a case by pointing out that the comparables used were in an inferior school district or a subdivision that didn't have a homeowners association with swimming pools and tennis courts, that all the comparables were distressed or real estate-owned sales, or that they have other negative externalities influencing value, such as being on a busy street.

“Explain why they are different and not equal to yours,” says Ailion. “🤪You must prove something is in error wit♎h the comparables selected.”

What Can I Do if My Home Appraisal Is Low?

If you can't successfully challenge a low appraisal, how do you ensure the refinance goes through? If the appraisal pegs you at less than 80% equity, then you won't meet the necessary 80% 澳洲幸运5官方开奖结果体彩网:loan-to-value (LTV) ratio and will need to pay PMI unless you choose to do a cash-in refinance, which means adding enough money at the closing to get to that magical 80%.

You can choose to pay the PMI for now. If home values continue to rise, you can later provide comparable sales to your mortgage servicer and ask it to remove PMI, even if you haven't yet paid down much of your 澳洲幸运5官方开奖结果体彩网:principal.

The Bottom Line

Understanding 澳洲幸运5官方开奖结果体彩网:how the appraisal process works will give you the ✨best chance of getting an appraiser to assign the highest possible value to your🎀 property. Purchase and refinance appraisals don’t always come in at the values that borrowers hope for, as they are a human process with room for subjectivity and mistakes. You can appeal a low appraisal, but you’ll only succeed at getting it overturned with strong enough data to back up your claim.