If you are considering getting a refinance appraisal on your home, it may feel like an intrusive process. This may be especially true because you may be thinking if it is necessary to undergo this process when you already have a mortgage. To help put your mind at ease, this blog post will answer the questions that may have crossed your mind.
Getting a Refinance Appraisal: What to Expect from It
If you still recall the time when you purchased your home, you may remember looking at the property’s purchase appraisal. You may find that the process of refinance appraisal is surprisingly similar to that of purchase appraisal. It will generally just involve getting a professional opinion of how much the property is worth.
Why Is an Appraisal Needed for a Mortgage Refinance?
Having an appraisal before getting a mortgage refinance will allow the lenders to know exactly how much your home is worth. They will need to make sure that your home will cover the amount on your new loan. Your lender will need to be assured that they will be able to recoup their losses (by selling your home) in case you default on your loan.
Factors to consider in a Refinance Appraisal
There are several factors to consider when a refinance appraisal is involved. Keep in mind that your mortgage company will not be the one in charge of having the appraisal done. These are the important factors that come into play when an independent appraisal contractor will come and appraise your home.
1 – Basic Condition of the Home
The appraisal will look into the basic condition of your home. They will not look into the design and color of your home, but they will be more focused on the safety of living in your home. An example is that they will not look into the color of the paint in your home but they will check if there is any lead content in your paint. If your home does not pass safety standards and regulations, you can expect the appraisal value to be significantly lower than if it were in livable condition.
2 – Upgrades to the Home
They will also take into account any upgrades you have made to your home. These upgrades will usually increase the value of your home. However, the upgrade needs to be a permanent fixture in your home for it to be considered in the appraisal.
3 – Homes Near Yours
Because the location of a property is such a significant factor that comes into play when the price of a home is being decided, the appraisal will also look into public records of the houses near yours.
In a nutshell, having your home appraised will allow all the parties involved to get a good grasp of the home’s overall market value. Having a good understanding of the home’s value will play when the home’s mortgage is refinanced. You will be able to give your lender a detailed account of your home’s worth, and you may be a little surprised to find out what it is actually worth after the appraisal.
If you are ready to get your mortgage refinanced, come to Gagliano Mortgage, Inc! We are committed to providing clients with the highest quality home loans combined with some of the lowest mortgage rates available in all of Alabama. Work with the best mortgage brokers in Birmingham by contacting us today!