Home Appraisals and Your Mortgage

To appraise something is to assess its value or quality, and while it can be applied to any number of things, it’s also an integral aspect of the home buying process. During this step, a state-licensed appraiser will evaluate both the home and the property in question. This is performed to give an estimate of how much the home is worth, and when it comes your mortgage, it is used as a piece of the puzzle that leads to getting approved for a loan.

The determination of the value of the home is based on several factors including the condition, type and size. The appraiser will then take those aspects of the home and base the worth of the house on recently closed sales. Typically looking into sales during the previous year, the appraiser will look at the sales on homes that are comparable and make the determination off of that.

Accunet and its money sources will review the loan to determine that your credit, income, down payment and the appraisal all meet required guidelines. This is called underwriting the loan. This is when things can get a little bit more confusing and it’s a great example why going through experts, like the team at Accunet, are imperative, because as the cliché goes – the devil is in the details.

Say, for instance, you have an accepted offer on a home and the appraiser comes back with a lower value than the agreed upon price. As a mortgage lender, Accunet can only lend on the lesser of the purchase price or the appraised value. So in this circumstance, it’s wise to include an appraisal contingency in your contract. This way, if the appraised value of the home comes in below the agreed upon price, you as the buyer will have the right to come back to the seller and decide to walk away from the deal, choose to bring the difference in cash or to negotiate down to a different price.

There are also situations where the home appraisal report may not address all the questions the loan underwriter might have about the property and its value. It’s not necessarily because the value wasn’t accurate, but there may have been a detail that needs correction so that it’s acceptable to the underwriting rules. This is another situation where going with a mortgage lender like Accunet Mortgage is in your best interest, because we have the expertise to make sure all details are addressed to get your loan approved.

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