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.