Renovation Mortgage Process Step #4
Understanding Residential
Renovation Mortgage Appraisals
Understanding Renovation Mortgage Appraisals
A critical component to buying a home is the appraisal. An appraisal is a third-party professional evaluation of the value of a property that is used to help determine the amount of a loan.
In compliance with government regulation, appraisers hired for a mortgage transaction on a conforming loan are chosen from a pool of qualified appraisers at random. Neither the borrower nor lender have the flexibility of deciding which appraiser will inspect your home.
Once the Work Write-Up from your HUD Consultant or detailed Bid from your Contractor is completed and reviewed by the Lender, it will be sent to an appraiser who uses it to estimate what the property value will be based on completed improvements. (Note: At times once the appraisal is received Bid additions/updates/tweaks/clarifications may be requested from you or your Contractor to helpfully clear the Property Approval stage.)
Mortgage Loan Process
Step 1: Documentation
Step 2: Contractor Selection
Step 3: Renovation Inspections
Step 4: Appraisal
Step 5: Underwriting
Step 6: Conditional Approval
Step 7: Clear To Close
Step 8: Closing
Step 9: Renovation Work Begins
Please feel free to contact us at any time if you have any questions about your loan status or the next steps in the process.
Appraisals 101
A few key components of an appraisal
- The Site: Location, view, topography, lot size, utilities, zoning, external factors, highest and best use, landscaping features…
- Design: Quality of construction, finish work, fixed appliances, and any defining features…
- Condition: Age, deterioration, renovations, upgrades, added features…
- Health and Safety: Structural integrity, code compliance…
- Size: Above grade and below grade improvements…
- Neighborhood: Is the property comparable to others in the neighborhood?
- Functional Utility: Is the property functional as built – style and use?
- Parking: Garages, carports, shops, etc..
Other Factors in Determining Value:
Curb appeal, lot size, and conforming to the neighborhood are obvious to the appraiser when they drive down into the neighborhood and pull up in front of your home.
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Review the previous step in the mortgage process.
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