Home Appraisal Tips for Refinancing

va-loan-closing-costsWith how the current real estate market is, many current home owners are looking to refinance to take advantage of the current mortgage rates.  The refinance process can be overwhelming for those who are unsure about what goes along with it.  In order to refinance, an appraisal needs to be done on the home to assess its current value. Let Majestic Home Loan help you with some quick tips on what to expect from this process.
One of the top reasons that mortgage or refinance applications are rejected is due to the home appraisal.  When a home owner is looking to refinance their current mortgage loan, they are required by lenders to get a verification of the value of the home.  In worst case scenarios, if the appraised worth is lower than the expected value of the home, banks may charge higher interest rates, require mortgage insurance, or deny the loan altogether.
Appraisal values are determined based on a variety of factors, including:
    • The current age and condition of the home
    • Modifications or upgrades that have been done to the home since the last appraisal
    • Current market value of other homes in the area.
A few ways you can aid in the appraisal process and give you a general idea of market value of your home are:
    • Gather sales data from other homes in your area.
    • Talk about any below market sales in your area, and find out the reason the home was sold for a lower than expected price.
    • Mention any upgrades that may have been done to the home to the appraiser before the process begins.
    • Have whatever permits or paperwork you need for your upgrades before the approval.
    • Take note that some improvements such as a finished basement will not add as much value as you may believe.
    • Understand that home appraisals are based on sale price and not listed price.
The reason home owners want to refinance their current mortgage loan is to replace it with a new one.  This usually means that the refinanced loan will have new rates, terms, and payments.  If all goes well, the new loan will have lower payments to save you a great deal of money over time, and help you pay off the loan quicker.
If you are looking to refinance your current mortgage, contact a licensed loan officer here at Majestic Home Loan to get started today, or give us a call at 1-877-546-2145. 

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