Do you need an appraisal to refinance a mortgage?

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A home appraisal can ensure that a homeowner is paying what the home is currently worth. (iStock)

Before you refinance your mortgage, you’re going to want to understand all of the steps involved. For example, do you need an appraisal to refinance? If you’re not sure, you’ve come to the right place – after all, refinancing your mortgage doesn’t have to be complicated.

With Credible, you can streamline refinancing. The online market offers free tools that allow you to compare types of loans, including refinancing rates, requirements, and other fees involved.

If you’re looking to refinance your mortgage, here’s what you need to know, especially if you need an appraisal to refinance. And if so, what exactly does this imply.

Do you need an appraisal for your refinance?

Almost all mortgage lenders require homeowners to undergo an appraisal of their home. Homeowners who have a USDA or VA loan may not be required to complete another appraisal, said Jackie Boies, senior director of housing and bankruptcy services for Money Management International, a nonprofit debt counseling organization. based in Sugar Land, Texas.

If you are considering refinancing, consider using Credible. You can use Credible’s free online tool to easily compare multiple lenders and see pre-qualified rates in as little as three minutes.

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“Every lender and type of loan has appraisal requirements, and they vary,” she said. “Evaluating your home allows you and the lender to know the fair market value of your home.”

You can also use an online mortgage refinance calculator to determine new monthly costs.

People who have a conforming conventional loan from Fannie Mae or Freddie Mac might also avoid a home appraisal if the loan-to-value ratio is “already where it needs to be based on original value,” said Timothy Garrity, COO and Broker at Copper Hill Real Estate in Philadelphia.

Pros and Cons of Mortgage Refinance Appraisals

Benefits

Refinancing valuations have several advantages, including:

  1. The value of your home could increase
  2. You could get lower refinance rates

1. The value of your home could increase: One advantage is that the home can receive a higher appraisal, which is useful if a homeowner is seeking cash refinancing.

You can visit Credible to get prequalified for such a loan and to research loan options among different mortgage lenders. By providing simple personal information, you can find out if you can get approved instantly and see what refinancing rates you qualify for.

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2. You could get lower refinance rates: “On the plus side, you might find that your house is worth more than you thought,” Boies said. “A higher value may put you in a position to earn a lower interest rate. You may be able to eliminate or avoid private mortgage insurance (PMI) if the home is worth more and you have a loan that is less than 80% of that value.

To see your mortgage refinancing options today, check out Credible. Credible can help you compare prequalified rates from multiple lenders in minutes.

The inconvenients

There are also several downsides to refinancing appraisals:

  1. You have to pay for it
  2. This could have an impact on your loan amount

1. You have to pay for it: One downside is that owners have to pay for the appraisal.

2. This could have an impact on your loan amount: If the appraisal comes down to a lower value, it changes the amount a homeowner can borrow or even put themselves in a position of not being able to refinance, she said.

Before you begin the process, visit an online marketplace like Credible to view refinance rates and get cash refinance.

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What is an appraiser looking for for refinancing?

A landlord could receive different values ​​from three appraisers, said Cara Ameer, real estate agent at Coldwell Banker Vanguard Realty in Ponte Vedra Beach, Fla.

“Evaluations are subjective and considered an art, not a science,” she says.

Appraisers look for several elements in a mortgage refinance, including:

  1. Prices of comparable homes in the area that have recently been sold.
  2. The condition of the house, such as the roof and the heating and cooling system, as well as the size of the house, the number of bedrooms and bathrooms, and the total square footage.
  3. All upgrades, high-end finishes and recent renovations are factored into the assessment and can have a positive impact on it, Boies said. Weird floor plans, outdated kitchens and bathrooms, or poorly done finishes can negatively impact this.

How should you prepare for an assessment?

Here’s how to prepare for a home refinance appraisal.

  1. Stage your home
  2. Clean, declutter and organize
  3. Prepare a list of upgrades and new features

1. Stage your home: Make your home “show off” like inviting a guest into your home, said Carol Lynn Upshaw, senior mortgage creator at Atlanta-based Hyperion Mortgage.

“If there are minor things that need to be fixed, I would suggest going ahead and doing them, so that they are not noted in the assessment and left out”, a- she declared.

2. Clean up, de-clutter and organize: Homeowners should clean, declutter and organize their items and add a plug-in or light a candle to keep the house smelling nice, said Timothy Garrity, chief operating officer and broker at Copper Hill Real Estate in Philadelphia.

“Who doesn’t have a good feeling when he walks into a house that smells good,” he says. “Evaluators are busy and they’re always on the go, going house to house and neighborhood to neighborhood. Anything you can do to make their job and experience more enjoyable is generally appreciated. “

3. Prepare a list of upgrades and new features: Prepare a list of improvements and features in your home and have a copy of your floor plan and survey available to the appraiser.

“The appraiser will still have to measure your house and take exterior and interior photos for the purposes of the report, but the easier you can make it in terms of providing information the better,” he said. said Ameer. “Evaluators go to many homes every day to compile information and usually have a very short deadline to produce a fairly detailed evaluation report.”

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Current mortgage and refinancing rates

  • Average refinancing mortgage over 30 years: 2.81%
  • 15-year average refinance mortgage: 2.32%

To understand how much you could save on monthly mortgage payments by refinancing now, calculate the numbers and compare rates using Credible’s free online tool. Within minutes, you can see what many mortgage lenders are offering.

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