A real estate appraisal company is useful whether you are buying or refinancing a home. Owning a house comes with a lot of benefits such as mortgage interest deductions and capital gain exclusions. Often, you need to get a loan to buy a home unless you are a millionaire. Sometimes these loans come with hefty interest rates. Luckily, you can refinance your home. By refinancing, you can find a new mortgage that offers better terms. This way, you can save thousands in interest payments.
A New York property appraiser can help you with your refinance application or when applying for a home loan. Here are a few things you need to know about property appraisals:
Determining Home Equity
A lender will not approve your refinance application without a residential real estate appraisal. This will determine how much equity you have in your property. Often, lenders require at least 20% equity before approving a refinance application. If your home has depreciated from the time you purchased it, your equity might be insufficient. There are, however, some mortgage lenders who require equity as low as 10%. This means that your home’s appraisal value won’t need to be high.
Home Affordable Refinance Program
If a real estate appraisal company finds your home’s value to be lower than 20%, you can still qualify for a refinance. With the Home Affordable Refinance Program, lenders are encouraged to refinance mortgage loans of property owners who owe up to 125% of their home’s worth. The federal government gives them financial bonuses. To qualify for the program is to be current on their mortgage payments.
Buying a Home
When you apply for a mortgage loan, the lender will want to find out whether the property you are eyeing is worth the price you are willing to pay. To do this, they will order a home appraisal. A New York property appraiser finds out if there is anything that can possibly cause depreciation or appreciation of the property’s value.
Appraisers are licensed professionals usually hired by the lender. They have extensive knowledge about real estates such as housing trends, market conditions, and neighborhood growth.
The Cost of Home Appraisals
The cost of a home appraisal is determined by its value, size, and location. They usually cost a few hundred dollars. There are cheap appraisals called “drive-by appraisal.” Most lenders, however, will not accept this kind since the appraiser only drives by the property and then consults real estate records before making an estimate. It does not include sketches and photos of the property or a walk-through inspection to check for safety code violations and similar issues.
Who Pays for Home Appraisals?
Because a home appraisal is a requirement for a mortgage loan, it is the home buyer that pays for the cost. Sometimes, however, the seller orders and pays for the appraisal to show buyers that their asking price is reasonable.
Property appraisals are essential to the real estate industry. Whether you are looking to buy a home or refinance your mortgage, understanding the appraisal process can make the transaction easier.