When you are purchasing a new home, refinancing a current mortgage, or selling your home, you will need to get the home appraised. An appraisal determines the value of a home and consists of an inspection of the property and compares it to the value of other homes in the area. Going through a home appraisal can sometimes be stressful, so having a better understanding of how the process works can help make it go more smoothly. If you are getting a home appraisal in Knoxville, Maryville, Lenoir City, Oak Ridge, or Gatlinburg, Tennessee, the loan specialists at Foundation Mortgage can help to guide you through the process.
Home Appraisal Basics
A home appraisal occurs when a home is purchased and sold and when a home is refinanced. A home appraisal is an objective evaluation of the value of a home and is completed by a licensed professional. In a lending situation, the home serves as collateral for a mortgage, so lenders want to ensure that homeowners do not overborrow money for a property. In the event that a borrower is unable to afford the mortgage, the lender will have to sell the home to recover the money, so the appraisal protects the lender from lending more money than it may be able to recover.
The Home Appraisal Process
In order for an appraisal to be requested by a lender, the buyer’s offer on a home must be accepted and a purchase agreement must be signed. After that, an appraisal can be ordered and an appraiser can inspect the value of the home. The borrower is required to pay for the appraisal fee, which usually costs a few hundred dollars. The appraiser will evaluate both the exterior and interior of the home to ascertain its worth, and will inspect the home to determine if there are any safety issues and if the electricity and heat work properly. Other factors that the inspector takes into account are the square footage of the property, number of rooms and bathrooms, neighborhood demographics, etc. You may have the option to be present during the home appraisal if your lender consents.
When finished, the appraiser will create a report detailing the condition of the property, and this process usually takes one to two weeks. You can request a copy of the appraisal report, and have a specific amount of time to review it for accuracy. If the appraised value is close to the buyer’s offer, the loan can then be processed. If the appraised value comes back as less than the expected amount, you can alert the lender to reevaluate the deal or order a second appraisal, but the borrower would be responsible for the second appraisal’s cost in that event.
Get Help Understanding the Home Appraisal Process
If you are purchasing or refinancing a home in Knoxville, Maryville, Lenoir City, Oak Ridge, or Gatlinburg, Tennessee, and are looking to better understand how the home appraisal process works, Foundation Mortgage can help. Contact our offices today for a consultation.