A mortgage refinance allows you to leverage your assets and improve your credit rating. However, it’s not as simple as dotting your i’s and crossing your t’s on a couple of documents. Your lender is likely to require an appraisal to determine your house’s value.
Why Do Lenders Need to Conduct an Appraisal?
Real estate is one of the most dynamic industries today. Property values often fluctuate, so the price you got for your mortgage is probably not the current market value of your home. Although most borrowers intend to repay loans, circumstances could prevent them from doing this.
The worst-case scenario is that they will repossess the property in place of repayment, and the lenders must make sure that the house can cover the amount that the debtor owes. At times, lenders do not even require appraisals; for example, conventional home loans do not need one, while government-backed loans are more likely to ask for an assessment.
How Can You Prepare for an Appraisal?
Typically, an appraisal will schedule a visit to your house and inspect your property. After this, they will prepare a report which they will deliver to the lender. You will also get a copy of this document.
An appraiser will want to observe the quality and condition of your rooms, fixtures, and floor coverings. They will also look at your appliances and countertops and other factors that could influence your home’s resale value. They will note special features, remodeling, and areas that need repair, taking photos and measurements.
To prepare for an appraisal, you should make sure that your home is looking its best. You shouldn’t rush to have major renovations, but it won’t hurt to clean and declutter your house. Tidying your yard and your interior will help make your residence more presentable.
Putting on a fresh coat of paint, replacing broken windows, updating window treatments, and cleaning your carpets are great ways to prepare. When the appraiser comes, turn on all the lights and open all the doors. Doing this will make your home appear warm and friendly.
How Should You Approach a Low Appraisal?
If you get a low appraisal despite your preparations, don’t despair. First, read the report and confirm that the information is accurate. Your appraiser could have made a clerical error, in which case, you could contest the report.
If you wish to do this, you have to prove that your home should be valued higher. You could cite similar homes in the area that sold for more, or other proof that a realtor can help you gather. You could also ask for a second opinion on the appraisal.
Take note that it is not easy to appeal a valuation. In case the appraisal returns a figure that is far less than you hoped, the simplest way to move forward is to start the process over with a new lender.
Mortgage Refinancing with Desert Springs Mortgage
Having your home appraised can be nerve-wracking; it feels like you’re putting your best foot forward for dinner guests or a date. However, your efforts to prepare will be worth it once you get a positive rating. Ensure that you’re successful by consulting with a real estate agent or a broker knowledgeable in preparing a home for inspections.
Book an appointment with Desert Springs Mortgage to learn all you should about mortgage refinance in Phoenix, Arizona. Figure out the best steps for your financial situation; contact us today at (623) 432-1309 to learn more.