11/25/2021
The Home Appraisalš”
Whether youāre purchasing a new home or want to complete a refinance of your current mortgage, itās important to understand the role of the home appraisal and how it can impact the outcome of your mortgage application.
After you submit an application, your lender may require an appraisal, which is simply an unbiased determination by an accredited independent appraiser of the market value of the property your lender will be financing.
š”When you purchase a home,Ā your lender wants to be sure that the homeās selling price is an accurate representation of the homeās condition and neighbourhood, and that you are not borrowing more than what the home is worth.Ā TheĀ lender also wants to be sure the property meets its lending guidelines.
š”When you refinance your mortgageĀ for debt consolidation or to access funds for other needs, the appraisal will be used by the lender to determine the amount of funds that you can borrow since you can only refinance a set amount, up to 80% of your homeās appraised value.
š”When switching your mortgage to a new lender at renewalĀ to get a better rate or terms, the appraisal is required to verify the propertyās value. To complete the appraisal process, an appraiser typically visits the home to get the information needed. The appraiser will also analyze market comparables and then provide the lender with a written opinion of the propertyās value. If the appraised value is sufficient, your mortgage approval is finalized assuming all other conditions have been met. The cost is often passed along to you, typically forming part of your closing costs.
