Get a Good Appraisal
Sinking home values are often lowering appraisals as well. If you are considering refinancing your home, what do you need to know about the appraisal process to help ensure that you get the best possible appraisal on your home? Because your appraisal is used to evaluate how much your home is worth and sets the maximum amount you’re allowed to borrow against your home, your appraisal is the first yet one of the most important steps in refinancing. But be careful about getting a home appraisal completed before your lender has reviewed and approved your income and credit.
Since your appraisal is always the unknown factor in the refinance equation, you should research the value of your home as the first – and most important – step in preparing to shop for a home loan. In today’s market, most people don’t realize how the value of their homes may have changed over the past 6-12 months. Having a realistic sense of your home’s current market value can help you shop and compare mortgage refinance options and save you time, money and aggravation in refinancing your home.
Loan officers have many tools at their disposal to help you through the appraisal process, and a great loan officer will leverage their knowledge to guide you. You can help the process by continuously researching the value of your home and homes in your neighborhood. Pay attention to foreclosures in your area; they will drive down the value of your home. Don’t forget, appraisers use “comps” (comparable market sales) of local properties sold within the last six months to value your home, so make sure to work with a great loan officer who will leverage his/her knowledge to research comps in your area, before ordering the appraisal.
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