An appraisal is simply an ‘official’ assessment of a property value. It is an integral part of a home-buying process since the mortgage lender expects the correct valuation of the property you will be purchasing.
When you apply for a loan for buying a house, the mortgage lender will require a report from the appraiser about the market price or a possible selling price of that house. These will be ordered by America Mortgages at the Processing Stage of your loan – on your behalf and will be the only time we will ask for any form of payment.
It’s a rough estimate that the lender uses to determine the mortgage rate. The principal or loan amount will be lower than the appraised value of the property. America Mortgages loans out 75% (for Foreign Nationals) to 90% (for U.S. citizens) of a home’s appraisal value.
The appraisal must be done by a person or an organization with the required licenses in that jurisdiction.
A licensed professional appraiser will work without any bias and make sure that the estimation is fair. When the lender requests the appraisal during the mortgage approval process, it will be randomly selected from a panel of reputable companies to ensure an unbiased opinion.
So, what features of the house matter to the appraiser? Some people have the misconception that eye-catching decoration and luxurious furniture increases the price. In fact, these things add value during other steps of home buying and selling, not in the appraisal process.
A home’s value will depend on its current condition, square footage, number of bedrooms, location, neighborhood, and a handful of other things. Appraisers will also note the views, which means overlooking a beach, lake, or the city. A property in a prime location or a prestigious neighborhood will qualify for a higher loan than those located in a less desirable area.
Normal appraisals range between $500-800 depending on State and location. If a lender requires a Rental Comparison, it may add $100-200 more.