If you are shopping for a colorado va loans to purchase a home or purchase your current mortgage, you may already know that a home appraisal is almost always required before a loan can be approved for a florida reverse mortgage. However, if you are like many other borrowers, you might not know about appraisals or why they’re are so essential.
Appraisals have been a hot topic in recent months due to new rules that have changed how loan providers and mortgage lenders orders appraisals for certain types of loans. The rules are spelled out in the Home Valuation Code of Conduct (HVCC), which became effective May 1, 2009.
What is the appraisal?
A real estate appraisal is an opinion of a property’s value prepared by a licensed real estate appraiser. Each home is unique, so the appraiser must rely on her experience together with the information gathered about the neighborhood such as home sales prices of other comparable property to determine the value of a real estate. Appraisal are meant to be unbiased and free from the influence of anyone’s opinion of the home’s value. The new rules have placed greater restrictions on attempts to unduly influence appraisers.
Who pays for the appraisal?
Borrowers pay for a home appraisal upfront since the appraisal must be completed before the banks will approve the loan. Under the new HVCC rules, borrowers who switch to a different servicers during the mortgage process, as sometimes happens, will most likely have to pay for another appraisal to satisfy the new mortgage companies approval requirements. Even though the borrower pays the appraiser’s fee through the mortgage companies, the appraiser typically is independent of the loan providers. The main purpose of an appraisal is to help the lender assess the value of the property and decide whether to approve the loan. That’s why a new appraisal typically is required for a loan refinance as well as a home loan.
Is an appraisal the same as a home inspection?
Another common misconception is that a home purchase appraisal is the same as a home inspection. Appraisers do consider the condition of the home and may note any major problems.
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