Refinance Appraisal Tips

With 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 rather hectic for those who are unsure about what goes along with it.  An appraisal needs to be done on the home to assess the current worth in order to refinance. 

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 home, it is 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, things such as higher rates, requirement of mortgage insurance, or denial of the loan can happen. 

Appraisal values are determined based on the current age and condition of the home.  Some factors taken into consideration about the appraised value of the home include any modifications or upgrades that have been done to the home since the last appraisal.  Another aspect that is factored into the home value is the current market value of other home in the area.  Since the appraisal process is out of your hands, here are a few tips and tricks on how to improve your home’s value and help you refinance.

• 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 before the process begins to the appraiser.
• 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.

Mark Scheets is a writer for Total Mortgage Services.  Mark is a graduate of Southern Connecticut State University and has written numerous articles on home buying and home improvement related topics.