When you apply for a mortgage, deciding on a land survey versus appraisal may seem trivial. Make sure you order the correct service before you pay for an unnecessary examination.
Learning more about what to expect from a land survey or an appraisal—and how they can impact your home buying options—helps you make the most of these useful reports when you are applying for a home mortgage. Both have value to you as a homeowner, but a land survey and home appraisal are two very different things.
What Is a Land Survey?
During a land survey, a professional surveyor will take a look at your property (or your prospective property) and clearly define all property boundaries to delineate what you are purchasing. This will give you a clear idea of how far your property extends, where the property lines are and what, if any, easements or issues may exist.
You may be required to get a survey to obtain the title insurance you need to purchase your home. A survey also lets you know more about the marketability of your home and informs you of any issues that could arise up front – so you won’t get any unpleasant surprises after the purchase.
What Is a Home Appraisal?
An appraisal takes a thorough look at your home and property to determine its current value. A professional appraisal will include the interior and exterior of the home, comparisons with similar homes in the area, and important details both you and your lender need to know before you purchase a home or refinance your current one. If the home does not appraise as well as expected, you could have difficulty finding a mortgage for it—even if your credit and financials are in good shape.
An appraisal can also provide key insights into your home and how it can be expected to financially perform in the future. An appraisal is required by most lenders and is also an important source of information for you, the prospective homeowner as most lenders won’t lend you more money than the appraisal value estimate. For the most accurate appraisal possible, hire an experienced appraiser who is deeply familiar with the area in which your home resides.
Land Survey Versus Appraisal
Both a land survey and an appraisal may be required by your lender, but they provide different insights into the property being evaluated. Use the survey to make sure the property lines are correct, that the home is within the correct borders and that it is not encroaching on other property (or being encroached upon). The survey details important information that may not impact the value of the home, but provides data that you need to have.
It is worth noting that you may need a land survey for a mortgage application if you are buying a plot of land with the intention of building your own home.
The appraisal provides essential data about the value of your home and is required by virtually all traditional lenders. A professional appraisal not only gives you an idea of the value of your home today, but also insight into its likely future worth and any possible problems that may arise or worsen with time.
Which Do You Need to Apply for a Mortgage?
Most often, you will only need a residential appraisal to appease your lender. Your lender will inform you if you also need a land survey. However, having both a land survey and a home appraisal ensures that you are fully more informed about the property you wish to buy. Having a professional assess your potential new home and give you a trajectory of its true worth can help ensure that you are making a wise financial decision.
If you are applying for a home mortgage and need a residential appraisal in Arkansas, contact Ferstl Valuation Services at 501.313.0641 to schedule a consultation.