Whether you’re looking to change the terms of your mortgage, secure a more favorable interest rate or want to tap into the equity you’ve built up in your home, refinancing your home loan could come with many benefits. However, this process includes a home appraisal, which can feel daunting for some.
To help ensure your home appraisal goes as smooth as possible and that it comes back favorable for you, learn about how you can prepare.
How Does a Refinance Appraisal Work?
After you’ve applied for a refinance and before the loan is finalized, your lender will order an appraisal. The appraiser will then schedule a visit with you. During this visit, they’ll observe, assess and document the interior and exterior of your home including the number of rooms, structural integrity, renovations and safety concerns among many other things. They’ll also likely compare your home with other similar properties in the neighborhood including recent sales.
Your Preparation Checklist
While your home aesthetics can’t hide deeper foundational issues, appraisers often see clean, well-kept homes positively. There are some ways you can prepare your home to look its best before your scheduled appraisal visit.
Provide Documentation of Your Upgrades
If you’ve made renovations, remodels or improvements since you’ve moved into your home, it’s important to write them all down and point them out to the appraiser as they’re doing their walkthrough. Many modern updates, such as smart appliances, replacing windows or even adding privacy fencing around your home, could help your appraiser determine an accurate appraisal. You may also need to provide sales receipts or invoices.
Improve Your Curb Appeal
Don’t forget about your home’s exterior. Curb appeal is important in an appraisal, and you don’t even have to take on large projects to improve it. Power washing your sidewalks, de-weeding and mowing your lawn and even adding simple plants can make a huge difference in your home’s curb appeal.
Tidy Up the Interior
Give your home a deep clean to ensure it looks its best for the appraisal. This can include dusting areas not often touched, mopping and shining hardwood floors and decluttering every room so the appraiser can easily walk around and see the space’s potential.
Do Your Research on Comparable Properties
The appraiser will likely compare your home to others in the area. While you don’t have control over other properties, it’s important to have a good understanding of their sale prices. If your appraisal comes back lower than expected or you don’t think it’s accurate, you’ll have some evidence to back up your claim. In this instance, you can write a letter of appeal.
Ensure Your Home Systems Work
Make sure your heating, ventilation and cooling (HVAC) systems, appliances, home security and plumbing are working and functional. If you find that something isn’t working properly (or not working at all) you’ll likely want to fix it or hire someone to repair it before your scheduled appraisal.
Make Small Improvements
Just like your curb appeal, making small upgrades inside can make a huge difference. This includes giving your walls a fresh coat of paint, adding a backsplash or changing out your cabinet and drawer hardware. While often overlooked, these improvements can drastically change the look and feel of your home.
What to Expect
Besides understanding what the appraiser will look at in your home, it’s also important to understand some of the logistics of an appraisal.
Types of Appraisals
In addition to the traditional appraisal in which a professional physically visits and examines a property, there are a couple other kinds of appraisals you should know about.
Drive-By Appraisal
In a drive-by appraisal, the appraiser would not go into the home. They’d only inspect the home from the outside and rely on other public records to estimate the home value.
Desktop Appraisal
Desktop appraisals don’t require a person to visit the property physically at all. Instead, the appraiser would look at public records, floor plans and recently sold homes in the area to assess value.
Hybrid Appraisal
In a hybrid appraisal, the appraiser would have a third party perform the in-person inspection. These details will then be given to the appraiser who would add them to their research from public records and other resources to determine the home value.
Cost
According to a 2023 survey conducted by the National Association of REALTORS®, the average price for a single-family home appraisal is about $500 and can range from $300 to $800. It’s important to note that this number can vary depending on where you live.
Before you decide to refinance, remember that it has a cost that includes even more than the appraisal. Ensure you have enough money saved up to complete your refinance process
Timeline
In the same survey above, it was reported that the average time to receive an appraisal report from the lender after acceptance of contract was about 11 days. Keep in mind that delays not in your control can happen, so it’s important to do everything in your power to help the process go smoothly.
Are You Ready for Your Home Appraisal?
Understanding home appraisals and knowing what to expect can help prepare you and your home for your scheduled visit. Small aesthetic changes and having documentation at the ready can help your appraiser see your home’s potential and determine a more accurate home value estimate.
This information is intended for educational purposes only. Products and interest rates subject to change without notice. Loan products are subject to credit approval and include terms and conditions, fees and other costs. Terms and conditions may apply. Property insurance is required on all loans secured by property. VA loan products are subject to VA eligibility requirements. Adjustable Rate Mortgage (ARM) interest rates and monthly payment are subject to adjustment. Upon submission of a full application, a mortgage banker will review and provide you with the terms, conditions, disclosures, and additional details on the interest rates that apply to your individual situation.
