5.0
242 reviews
When someone is thinking about buying a home, one of the key parts is the home appraisal. The appraisal ensures that the buyer is paying a fair price for the home while also protecting the mortgage lender against taking a loss.
Traditionally, mortgage lenders have required an appraisal to be conducted on a home before a sale goes through. That’s because lenders want to make sure that the home is worth what the buyer agreed to pay for it. Lenders in Seattle and Denver do not want to loan out more money for a home that might be worth less than it was purchased for, as it places them at risk should the buyer ever default on the mortgage.
Appraisals may also be required because of what is mandated by authorities like Freddie Mac, Fannie Mae, and the FHA, depending on whether any of these entities are backing a mortgage.
On the other hand, an appraisal is also an added cost of the buyer can be a serious source of stress for both sellers and brokers.
Recently, government agencies have passed a rule saying that home appraisals are no longer going to be required on homes that are less than $400,000; however, many lenders will still require them.
Therefore, when should someone consider skipping a home appraisal to save some money?
One of the first ways to take a look at the value of a home appraisal is by comparing it to the mortgage. The two go hand in hand. Appraisals are important because they protect not only the seller and buyer but also the lender. The lender wants to make sure they know what the property is worth.
Therefore, an appraisal is more about valuing the property and not about the price of the home in WA, OR, ID, or CO.
In addition, lenders make loans based on either the sale price or the appraised value, whichever is lower. Lenders do this to make sure that buyers have invested enough in their own property.
In addition to considering the lender, it is also important to consider the borrower. An appraisal is helpful for the borrower because this prevents someone from overpaying for a property.
As a buyer, you want to make sure you are not paying more for a home than it is worth. This is a huge investment, and as such, you want to protect it. Having an appraisal will help ensure the value is there when you finalize a deal with a seller. Therefore, they act as a form of consumer protection.
On the other hand, they also cost the borrower a few hundred dollars. More specifically, buyers can expect to pay anywhere from $250 to $500 on an appraisal, depending on how complex the property is. While lenders may require an appraisal to be conducted, the service is paid for by the borrower. If money is tight, this can be a serious problem and could dull the appeal of a home.
As a buyer, you may want to have the home inspected by a professional home inspector before the deal is sealed. This will give you a chance to see if there are any issues with the property that may be a deal-breaker for you.
But doesn’t an appraiser basically do the same thing as a home inspector? Don’t the two involve checking out a property in detail?
No, a home inspection and an appraisal are two different things.
A home inspection is done to determine the condition of the property and involves inspection of all major systems, foundation, roof, and so forth. The inspection is done for the benefit of the buyer and gives important information regarding the condition of the home. They’re not required, but they are highly recommended, especially for older homes.
That way, you can back out of a deal instead of getting stuck with a home that will cost you thousands of dollars in repairs. Or, you can use the inspection report and go back to the negotiating table with the seller and request a reduced price.
The purpose of a home appraisal, on the other hand, is to determine the current market value of the home. For one, the outcome will ensure that the home loan is not any higher than the actual value of the home in Denver or Boise. It’s important to distinguish between home appraisals and home inspections.
In the end, people should consider skipping the appraisal if it saves them money. However, there will likely be cases where the lender will require an appraisal, and therefore it cannot be skipped. Lenders might still require someone to obtain an evaluation as a form of protection. If the buyer is not confident in this evaluation method, then a traditional evaluation might be a better approach.
It is important for people to feel confident in the sale price, regardless of how this happens.
Are you ready to make a home purchase and need a mortgage to finance it? Sammamish Mortgage can help. We are a local mortgage company serving the broader Pacific Northwest region, including Washington, Idaho, Colorado, and Oregon. We have been offering several mortgage programs and products with flexible qualification criteria since 1992. Please contact us if you have any questions or are ready to start the mortgage application process.
Oregon Home Loan Requirements Easing With DTI Rule Change
Summary: Home loan requirements in Oregon have been easing over the last couple of years, and some steps have been taking to relax some mortgage underwriting requirements. This article will go over how and why it may not be as…
Income Needed to Buy a Home in the Seattle Area, 2021
The median price of homes in the Seattle metro area has gone up over the years, though they have slowed down over the past 12 months. But exactly what type of income do you need to be able to afford…
With Very Few Listings On The Market In Boise, Fall May Be The Time To House Hunt
As a matter of custom and tradition, autumn was never the high water mark for house shopping, though there are some benefits to doing so. Re-locators, generally, like to be in their new digs by the time school starts. As with so many things, however, the ebb and flow of real estate transactions look different in the year 2021.
Do You Need 20% Down In Colorado for a Home Purchase?
Folks may have told you not to purchase a home without 20% down in Colorado, but do you really need to invest that much money? Read this helpful article to discover your options and understand what they mean to you.
The Most Popular Cities In CO For Relocating To Get A Better Deal On A Home
Relocating to different cities in CO is often motivated by the cost of home prices. People don’t necessarily move out of their home town because they’re undesirable, but because they’re able to find better prices elsewhere.
Is Now a Good Time to Buy a Home in Portland, OR?
Summary: Is now a good time to buy a home in Portland, Oregon? It’s a question that many homebuyer hopefuls ask themselves, and for good reason. In this article, we’ll help you determine if 2020 is your year to jump…
Will New Homes Be Available For Purchase this Year?
As the country works through the coronavirus pandemic and its effect on the economy, how will the real estate market fare? More specifically, will there be more new home construction this year and next? This article will attempt to answer that question.
Most Renters Are Paying Far More Than Their Landlord’s Mortgage
In the overwhelming majority of the 50 largest cities across the U.S., monthly rent is more than the mortgage payment for single-family homes. In several cases, much more.
How Much Can I Borrow for a Mortgage in Oregon?
Summary: This is part of an ongoing blog series in which we answer common questions among Oregon home buyers. Today’s question is: How much can I borrow for a mortgage loan in Oregon? This article will help answer that question.…
Buying a Home is Cheaper Than Renting in Seattle
Summary: Does the sound of getting a mortgage in Seattle, WA sounds way out of your financial reach? The truth is, renting can be even more expensive than paying a mortgage. This article will show you why a mortgage may…
Begin your home loan process today! Our mortgage advisors are standing by. Request a free personalized rate quote. (425) 401-8787
