![]() ![]() You do not want to overpay for a house that is not worth it. The requirements for purchase appraisals not only benefits the lender, but it also benefits you as the buyer. If you are foregoing a mortgage and paying cash, then you can avoid an appraisal before purchasing a home, otherwise almost all lenders will require a formal appraisal. ![]() When you buy a house, you will need a purchase appraisal in order to qualify for a mortgage loan. If you are a buyer looking to take out a mortgage on a property, you would seek a purchase appraisal. There are two major types of appraisals, purchase appraisals and refinancing appraisals. This helps your lender in determining how much equity you may be able to access if you decide to refinance your home and use the available equity for other purposes. If you default on your debt, this protects the lender from suffering a significant financial loss.Īppraisals are also important in the mortgage refinance process since they provide you and your mortgage lender with up-to-date information on your home's value, and its appreciation or depreciation. In the home-buying process since they ensure that you are not overpaying for real estate.Īppraisals also ensure that lenders do not lend you more money than your house is worth.Īppraisals ensure that lenders do not lend you more money than your house is worth and that the mortgage amount falls within the loan-to-value guidelines that the lender is comfortable with. Home Appraisals 101: Everything You Need to KnowĪ home appraisal is a professional estimate of the value of your home. What do you do if your appraisal comes back lower than expected?īefore beginning the appraisal process, it is a good idea to understand what appraisals are, why they sometimes come back low, and what you can do if you find yourself in that situation. Whether you are an aspiring homebuyer, or a homeowner looking to refinance your home, getting an appraisal can be a nerve-wracking process, as a lower than expected appraisal can hurt your potential of getting the mortgage that you need. ![]()
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