Knowing the true value of your California home can afford you a lot of power; for instance, it can help you have a more accurate understanding of your financial options, including whether or not you should refinance or take out a second home loan. Additionally, in preparing to buy a home, an appraisal is often part of the process that will determine what type of home loan you’ll need. Furthermore, appraisals can have a great effect on a refinance process, and it’s important to know what you’re getting into.
An appraisal takes place when a home value expert assess the true value of your home after a detailed inspection. Once the home has been inspected, the appraiser then compares the details and specifications of your home to others in the area. Sometimes appraisals aren’t required in the refinance process, depending upon several circumstances. The experts here at HMS Capital can help answer your questions about appraisals and guide you through the appraisal phase of a refinance process. Here’s some more information about home appraisals and what you can anticipate in the future:
All things considered, an appraisal is a relatively affordable portion of the home buying/selling process. Generally-speaking, an appraisal should not cost more than a few hundred dollars. There are certain variables that affect whether or not an appraisal will wind up costing you more than this estimated amount, including the type of building it is (like an apartment building with several units), and the location (the price might be higher for homes in remote locations).
Sellers want their home to appraise for a higher value so they can list their home at a higher price. However, if you’re buying a home and in the process of applying for a loan, you’ll hope that the value is low. In a refinance scenario, the appraisal value can greatly complicate things. For instance, if you are opting for a cash-out refinance, then you’ll likely need to adjust the amount of the loan to a lower value if the appraisal comes in lower. In this case, you could also wait to refinance until your home value goes up. Alternatively, a high appraisal value is optimal for refinancing. It’s helpful to do a little research before applying for a refinance, especially because the process can include non-refundable fees once you’ve come too far.