Before a home loan can move forward, someone has to take a closer look at the property to determine if the purchase price matches its value. That’s where an appraisal comes in. At its core, an appraisal helps determine what a home is worth. But beyond that, it helps protect both you and your lender as you move forward with your loan. Here’s five things to know about the appraisal process:
What Is A Home Appraisal?
A home appraisal is a professional, independent evaluation of a property’s value. It’s done by a licensed appraiser who assesses the home based on a combination of its condition, features, and comparable properties in the area. Lenders require an appraisal to confirm that the home’s value supports the loan amount being requested. In simple terms: they want to make sure the home is worth what’s being financed.
When Does The Appraisal Happen?
The appraisal typically takes place after your offer is accepted or once your refinance application is underway, and before final loan approval. It’s part of the broader underwriting process, where your loan file is reviewed to ensure everything (from your finances to the property itself) meets lending guidelines.
What Does An Appraiser Look For?
Appraisers evaluate value based on the home’s size, layout, and condition, recent sales of similar homes nearby, upgrades or renovations, and the overall neighborhood and market trends. In many cases, a full appraisal includes both an interior and exterior inspection of the home.
What Happens After The Appraisal?
Once the appraisal is complete, a report is delivered to your lender. That report determines the appraised value of the home, which can impact your loan in a few ways. If the home appraises at or above the amount you are borrowing to purchase the property, then everything moves forward as usual. However, if the home appraises below the purchase price you may need to renegotiate the price, cover the difference out of pocket, or explore other options with your lender. For refinances, a lower-than-expected appraisal may affect how much equity you can access.
Why The Appraisal Matters
The appraisal directly impacts your loan structure, approval, and terms. Basically, the process helps to make sure that everyone involved in the transaction is working with a fair property value.
While the appraiser is independent, there are a few things homeowners and sellers can do to make sure things go smoothly. Keeping the home clean and accessible, highlighting recent upgrades or improvements and addressing any visible repairs if at all possible can be helpful.
Overall, understanding how appraisals work puts you in a better position to navigate any surprises and make informed decisions moving forward. That clarity can help you take the next step on your homeownership journey with solid financial footing.
Looking to start saving today on your home loan? Let’s upgrade your mortgage and put money back in your wallet with a new Purchase or Refinance Loan.*
6 Money-Saving Tips To Start Today:
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Pay Off Your Loan Sooner Switch to shorter loan terms to save on interest.* |
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Lower Your Monthly Payment Refinance with longer terms, so more money stays in your wallet.* |
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Consolidate Debt Cash-out to reduce high-interest credit card debt. |
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Pay For Larger Expenses Invest in your home with updates that will yield a higher return should you decide to sell in the future. |
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Get Extra Savings After you have financed a home with us once, save up to $750 on all your future refinances and new home purchase loans with your AmeriWallet Benefits.** |
If you are interested in learning more about how a refinance or new home purchase loan can benefit you, just give us a call at 877.715.9908.
Imagine The Possibilities With Your Better Home Loan!
*By refinancing, your total finance charge could be higher over the life of the loan.
**As a member of the AmeriHome family, borrowers are part of the AmeriWallet Rewards program. If you completed a home loan with us once, you will qualify for a $750 lender credit for all of your future refinances or home purchases done with AmeriHome, for any property you own. To qualify for this offer, you must have previously financed the purchase of a home or refinanced with AmeriHome. You have financed with AmeriHome when AmeriHome Mortgage Company, LLC appears on the previous Promissory Note for your loan, and you are listed as a borrower on the Note. Credits will be applied only if your loan closes with AmeriHome. This offer can not be combined with any other offers and is not applicable for FHA Streamline, or VA IRRRL Refinance transactions. Other restrictions may apply. Terms and conditions are subject to change. AmeriWallet Rewards program is subject to termination without notice.
