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Home-Appraisal-Fees

Home Appraisal Definition

September 3, 2008

When you take out a mortgage the appraisal is part of the package sent to underwriting at your lender. It doesn’t matter if the mortgage is to purchase your home or to refinance, you must have a recent appraisal in order for the lender to approve your home loan.

Your home’s appraisal is an estimate of the current value in your regional market.

Mortgage appraisals use a market comparison to determine the value of your home. The appraiser will compare the recent sale price of three similar properties in your area to determine your home’s value. A “similar” property is one with the same amount of square feet, bed and bathrooms, features, property age, and geographic area. The similar properties also need to have sold within the past six months.

If you’re refinancing your mortgage will you always have to get a new appraisal? Not necessarily; if your appraisal is fairly current, usually within the past two years, your broker may be able to work around you paying for a new appraisal.

Declining Property Values

After the real estate bubble burst many homeowners across the country found their property values declining. In many areas of the country homeowners found they did not have enough equity in their homes to qualify for refinancing after the lender ordered a new appraisal. If this is your situation and you have an adjustable rate mortgage that is scheduled to reset soon and you will no longer be able to afford the payments the FHASecure program may be able to help you qualify if your payments are current.

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How to Save on Home Appraisal Fees

February 16, 2007

When refinancing your mortgage or borrowing against the equity in your home, the lender may require a recent home appraisal before approving your loan. Full blown appraisals typically run in the neighborhood of $300; however, there are ways to save money on your appraisal. There are four varieties of appraisals you should be aware of.

1. A complete home appraisal with photographs of the interior and exterior will set you back $300.

2. An exterior only home appraisal with photographs typically costs $250.

3. Drive by home appraisals cost as little as $100.

4. Electronic home appraisals, called Automated Valuation Model (AVM) use public records available on the Internet and provide an approximate value of your home based on the sale of comparable homes in your area and cost less than $100.

How do you know which type of appraisal you need? Your lender will determine which type of appraisal you need before approving your mortgage or home equity loan. If you’re purchasing your home with no or little down payment, or refinancing with poor credit you can expect the lender to require a full appraisal. If you have good credit with the required down payment of 20 percent, ask your lender if your approval qualifies you for a reduced appraisal which could save you $200.

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