A good appraisal is crucial to obtaining the best mortgage deal when you re-finance your home. As Summer melts into Fall, Palm State Mortgage thinks this is a fine time to re-finance your home. We are seeing quite a few home owners choose this option as opposed to selling their homes and moving to a new house. Palm State Mortgage Company often reminds clients that the success of their re-fi mortgage strongly depends on their home appraisal.
What’s New about the Appraisal Procedure?
A few regulations have improved or changed the appraisal process in recent years: However, the appraiser will still accomplish the same major goals.
A. He will declare an independent statement of the value of your home.
B. He will still base part of his judgment on the overall market values of comparable homes as well as the sale of homes in your neighborhood.
Some regulations have changed, modified or strengthened the old legislation that governs the appraiser’s responsibilities:
- No More Influence Peddling:
With the new mortgage laws, have come new legal defenses for impartial appraisers. These defenses are to reassure appraisers they will not be pressured, forced or intimidated by lenders, borrowers or brokers. Toward this end, today’s appraisers also use a recently standardized format.
- No More Express Line Appraisals:
Today’s lender instructions require appraisers to perform a complete visual inspection of the interior and exterior areas of the subject property. Today’s appraiser will do more than park in the driveway.
Every case is different, but you can guess that your appraiser will be checking out your home for a time, ranging from 20 minutes to 2 hours. They must also photograph living spaces. Their report and these images will testify to the condition of your home.
Sales vs Re-fi Appraisal: Don’t Change Horses Midstream
There is a distinct difference between an appraisal to sell your home and an appraisal to simply re-finance the loan on it. On the one hand, when you are selling, there is a purchase agreement that is part of the appraiser’s data.
On the other hand, if you are re-financing your home, there is no sale agreement and no “counter-balance to dispute the word of an appraiser’s valuation.” In short, the appraiser has the final say concerning the value of your home.
Appraisal and Our 5 Favorite Keys to the Kingdom
Below, you will find some of Palm State Mortgage Company’s favorite keys to a good appraisal. To put it briefly, you will want to spruce up, clean up and shine up inside and outside of your home and yard.
Appraisal Key 1. The Wow Factor
You must have curb appeal. Lawns, bushes and flowers must be neatly trimmed, edged and landscaped. Wash the windows and move the gardening equipment such as toys and broken or ugly lawn furniture.
Appraisal Key 2. Time For Elbow Grease
Scour the inside of the house within an inch of its life. The floors, rugs, kitchen, bathroom and laundry room appliances should gleam spotlessly. Ruthlessly wash, clean or iron your drapes, shades, blinds and curtains. Yes, mercilessly scrub soiled walls or touch up paint if you can.
Appraisal Key 3. Take a Step Back
When you are all finished scrubbing, polishing, sweeping and scouring, look at your home in its best cleaned–up condition, and then remove about a quarter of the clutter to make the space look at least as large as the measuring tape shows it to be.
And put this note in your “need to know” file: Appraisers have a $500.00 incremental rule when they see small repairs that need to be done. So every little thing he sees costs you a $500.00 de-valuation in his estimation of your home’s value.
Appraisal Key 4. Excuse Fido and Fluffy
Have no pets and no evidence of them inside your home. No appraiser deserves a sneezing fit if he is allergic to Fluffy. Tuck away the toys, food bowls, pet beds, leashes, and above all, cat boxes.
Appraisal Key 5. Copy and print a file for the appraiser. Within it, include a list of your home improvements and dates. Add invoices for the major repairs you have accomplished. Include that new roof, landscaping, stove, and paint. Add copies of your property tax bill, the survey, and HOA papers.
The Re-Fi Mortgage Appraisal and Your Home’s REL: File this Under “Good-To-Know!”
The appraiser has the power to judge the condition of your home and its effect age. This does not mean its real age in chronological years, but rather the age it attains as a result of good repair, remodeling, property improvements and upkeep.
This adds up to what the industry terms your home’s Remaining Economic Life. He will thus estimate how long your home will retain its market value. The five keys above are not iron-clad rules, but Palm State Mortgage Company reminds you they are the major ethical keys you have to unlock an acceptably high appraisal. (No, tea and cookies won’t help, but we highly recommend prompt and pleasant courtesy.)