What is a property worth?
How do you really know? A home appraisal is mandatory for obtaining a mortgage, but how exactly does such a thing work? In the article below, we briefly explain the home appraiser.
Why an appraisal?
Performing an appraisal allows you to see if the asking price of a home is realistic. The appraisal value does not have to equal the selling price, but should the appraisal value be much lower, the buyer may run into problems applying for a mortgage. An appraisal is a required component when applying for a mortgage. This is because when determining the amount of the mortgage, the market value of the home is looked at and not what the home was for sale or purchased for. You are then allowed to borrow a maximum of 100% of that value. So this is something to keep in the back of your mind!
Appraisal Report
The purpose of the appraisal report is to give you an objective assessment of the value of the home. This is determined based on the condition of the house, size, year of construction, and surroundings, among other factors. You may need an appraisal report for a variety of purposes, indicate this to the appraiser as well. For example:
- New mortgage
- Modification of existing mortgage
- Renovation
- Building insurance
How does the valuation work?
An appraisal requires the appraiser to visit the house. The appraiser accurately estimates the home value based on the home itself and the current housing market in the immediate area. An appraisal report is then prepared and can be forwarded to the mortgage lender. So having the home appraised is an important part of the buying process. You can look for an appraiser yourself, but homeup also has partners who can appraise the home at a market-based price.
