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Licensed by the Department of Financial Protection & Innovation under the California Residential Mortgage Lending Act. Additionally, if the equity in a home is less than 20%, lenders generally require the borrower to pay for private mortgage insurance (PMI) and/or offer less competitive interest rates.ĭoing business as Newrez Mortgage LLC in the state of Texas. If the current value of your home is less than the original loan’s principal (meaning you’re underwater on the mortgage and owe more on the home than it’s worth), refinancing is not typically an option. The same goes for refinance appraisals.įor refinances, an appraisal is crucial for lenders because it shows how much money home equity a borrower can borrow against. For instance, when you’re purchasing a home, if the home appraisal comes in at a lower value than the purchase price of the home, a lender typically won’t lend a higher mortgage amount than what the home is appraised for. Whether you’re purchasing or refinancing a home, an appraisal is a huge determining factor when it comes to the amount borrowed. Home Purchase Appraisal vs Refinance Appraisal Generally, though, the reports are similar in their conclusions. It’s important to note that depending on the appraiser, and sometimes loan type, the appraisal and process may look a little different.

Condition of the plumbing, electrical, and HVAC systems.

Photos of the property and its surroundings.

Many appraisers follow Fannie Mae’s Uniform Residential Appraisal Report for single-family homes. While the appraiser determines your home’s worth based on a thorough evaluation of the interior, and exterior of the property, taking note of the square footage, number of bedrooms and bathrooms, any value-boosting features, repairs needed, and more, many borrowers aren’t aware that the appraisal is also determined by sales comparison and current market trends.Īn Appraisal Report is a detailed document including observations made by the appraiser to determine the home’s value. The appraiser selects recent home sales of comparable size, utility, condition, and location. You may be wondering, how is an appraisal and appraiser scheduled? While you as the borrower are typically responsible for paying the appraisal fee, the lender typically orders the appraisal on your property – alleviating the legwork in that regard on your end.įor your home appraisal, a qualified appraiser is assigned to your property.

Here are answers to some of our most frequently asked home appraisal questions. If you still have questions, don’t worry, you’re not alone. Whether you’re on the buying or selling side of homeownership, the home appraisal ensures the sale price is appropriate for the property. Certainly not the most exciting of topics, but it’s an important milestone in the mortgage process.

Home refinance appraisal checklist