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    Getting a home mortgage? You’ll need to know how an appraisal works

    These days, mortgages require an appraisal of your home.  In short, the appraiser will look over everything in the house to make sure it is at least equal to the value of the loan are asking for to buy your new home.  This will give you an idea of the price of the new house you can afford before you start looking.

    The financial cost of the appraisal averages less than $500, but that greatly depends on the size and location of the house.  Bigger houses or bigger cities will drive the cost up.

    Several things factor into a home appraisal
    Several things factor into a home appraisal

    However, there are several other factors to think about when getting the appraisal.

    Firstly, the appraisal is based on the current market value.  Many of us know that house prices plummeted after the bubble burst in 2008.  However, as the economy has recovered, many housing developments have also recovered.  As a result, many neighborhoods have seen an increase in housing prices.  As the economy continues to improve, this increase will also continue.

    To get a sense of the value of a person’s home, be advised.  The appraisers only work for the lender.  Since they don’t work for the buyer or seller, there is less of a chance to haggle.  After all, this is not a car.  This is the home you’ve lived in for years.  So, if you’ve kept it in good condition, your appraisal could improve.

    But, keeping it in good condition isn’t the only thing appraisers look at.  They will compare the prices of recently sold houses such as yours in the neighborhood and compare it to your house.  This makes it doubly important to make sure your house is kept well because comparisons will present itself.  Make sure you are on the high-end of that comparison.

    When you get the appraisal notification, you should hope for a number that is higher than what you paid for it.  If that happens, there should be no problem selling the house.

    If the appraisal is lower, there may be an issue because – according to them – the house is worth less money, and you should consider asking for less than what you paid for it.

    If you need more money to buy your new home, the extra money will have to come out of your pocket.  That’s why it’s so important to keep up your house.  Just like cars, houses can depreciate over time.  If you don’t keep it up, your loan will not cover the full price of what you wanted in the first place.

    The Powell Group is here to help you get the most up-to-date information on the housing market and appraisal information.  We have several beautiful homes in our area, and they can all be viewed on our website.  Our team members are here to answer all of your housing questions and concerns.

    (Picture used from YouTube)

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