Any lender, bank, or mortgage company who is considering making a loan is going to require an appraisal done by an independent, professional, state licensed 3rd party appraiser. The aim of having an appraisal done is to verify that the value of the property being mortgaged is greater than the amount being asked to borrow against it. Additionally, the lender wants to make certain that there will be valuable collateral should the note not be paid and the lender has to take back the property.
A professional, independent appraiser will usually visit your home and inspect its interior and exterior, take a few photos and make some notes. The appraiser will take this information and search similiar homes online and in the database to form an opinion on the probable market value of the property considering sales of similar homes in the area. The appraiser will prepare an appraisal report explaining the conclusion. The appraisal belongs to the lender considering lending money with the home as collateral (even though it is paid for up front by the borrower) You can generally recieve a copy of the appraisal for your records as well.
A lot has changed in how the mortgage industry handles appraisals. Today appraisals are almost always ordered by the specific lender who is planning on funding the loan. If your broker runs into a problem with a particular lender, there are occurrences where a new lender may allow you to transfer your already completed appraisal to a new lender for a small fee. There are also times where an appraisal will be completed and forwarded to the underwriter of the loan. The underwriter may have a difference of opinion with the value and require the appraiser to provide more "comparables" or additional information to substantiate the value of the property, generally known as "appraisal review." if your loan program depends on your borrowing, for example, 95 percent of the property's value and no more, the appraisal value can impact your eligibility to qualify for the loan. In a "close" case like that, the best solution is almost always to increase your down payment, or we can help find another solution such as another loan program that works.
An appraisal can cost from $350 to $500 or more for very complex properties, but generally around $400. You as the borrower usually pay this fee via credit card once the appraisal is scheduled.
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