Homeowners in Arkansas may be surprised that an appraisal is needed to refinance a home mortgage. This assessment is the first qualification banks use to prepare their decision.
If you need to refinance your home, then you will also need an appraisal. In fact,
What Kind of Appraisal Do You Need to Refinance Your Mortgage?
When you plan to apply for financing, you will need documentation of all your assets, means to cover closing costs, and a loan-to-value appraisal. A loan-to-value appraisal tells your lender how much your house is worth vs. what monies you have already paid on the existing mortgage loan. Your lender will likely utilize a third-party appraiser to determine the value of your home.
Third-party appraisers have expert knowledge of the local market, which will allow them to assign a fair value to your home. Keep in mind that missing a detail that could add value to your home may be the difference between a successful re-finance and a rejected application.
What to Expect From an Appraisal
A third-party appraisal removes any biases that might have otherwise been associated with your home. It provides an accurate assessment that helps the bank determine if you and your home are still “good investments,” by providing an up-to-date assessment of the value of your home.
Through the appraisal, you can gain valuable insights into the current, local real estate market. This knowledge will help you to make an educated decision about whether you should refinance or possibly examine other options, such as downsizing, selling, or refurbishing to raise your property value.
The process is a very straightforward one:
- The appraiser will visit your home and record their observations of both the interior and exterior of the house.
- After the appraiser has visited your home, he or she will examine the official sales records of homes that are similar to yours.
- After an in-depth analysis, the third-party appraiser will give a professional and accurate opinion regarding the value of the home. This is the appraisal that will be submitted to your mortgage lender.
- The bank will use this value combined with your assets, credit history, and income, to determine how much it will approve in re-financing your home mortgage.
Preparing for the Appraisal
At every stage of the appraisal, it is vital that your home be in prime condition so the appraiser can accurately portray your home’s value. A more accurate appraisal leads to a more accurate re-financing application.
The better your appraisal goes, the more likely you are to be approved. Other than choosing an experienced and trustworthy appraiser, there are several things you can do to prep your house pre-appraisal:
- Tidy up your home both inside and out to make it appealing
- Mow the lawn, trim the bushes and clear away debris
- Fix peeling paint, cracked bricks, damaged gutters and siding
- Replace or repair torn screens, non-working door knobs and latches, worn-out carpet and damaged plumbing and light fixtures
- Make sure all your appliances are in working order
Remember that you can ask for a copy of the appraisal to look over for mistakes. However, if you do find errors, you must not contact the appraiser. It is considered inappropriate to contact your appraiser directly, and they are prohibited from discussing their findings with you. Instead, contact your lender who will communicate with the appraiser for you.
Contact the experts at Ferstl Valuation Services for a certified, trustworthy real estate appraisal of your home for your mortgage re-finance. Call us at our Little Rock office at 501-313-0641 or our Fayetteville office at 479-595-0245.