Sunday, September 13, 2009

What You Want To Know About Home Appraisals In CO

An appraisal is an important component of the home loan approval process

If you are shopping for a colorado stated loans to refinance a home or refinance your current mortgage, you may already know that a home appraisal is almost always required before a mortgage can be approved for a florida refinance. However, if you are like many other borrowers, you might not know about appraisals or why they’re are so required.

Appraisals have been a hot topic in recent months due to new rules that have changed how servicers and loan lenders orders appraisals for certain types of loans. The rules are spelled out in the Home Valuation Code of Conduct (HVCC), which became effective May 1, 2009.

What is the appraisal?

A property appraisal is an judgement of a property’s value prepared by a licensed real estate appraiser. Each property is unique, so the appraiser must rely on his experience together with the facts gathered about the neighborhood such as property sales prices of other comparable home to determine the value of a home. Appraisal are meant to be unbiased and free from the influence of anyone’s opinion of the home’s value. The new rules have placed greater restrictions on attempts to unduly influence appraisers.

Who pays for the appraisal?

Borrowers pay for a home appraisal upfront since the appraisal must be completed before the lenders will approve the mortgage. Under the new HVCC rules, borrowers who switch to a different servicers during the loan process, as sometimes happens, will most likely have to pay for another appraisal to satisfy the new loan providers approval requirements. Even though the borrower pays the appraiser’s fee through the loan providers, the appraiser typically is not an employee of the lenders. The main purpose of an appraisal is to help the lender assess the value of the property and decide whether to approve the loan. That’s why a new appraisal typically is required for a loan refinance as well as a home mortgage.

Is an appraisal the same as a home inspection?

Another common misconception is that a home purchase appraisal is the same as a home inspection. Appraisers do consider the condition of the home and may note any major problems.

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