Why a refinance may need an appraisal
Your home's value sets how much equity you have, and equity affects your loan amount, whether you need mortgage insurance and how much cash you can take out. Many refinances need an appraisal, though not all. Some loans can use other ways to confirm value.
The appraiser is an independent, licensed professional. Their job is to give an unbiased opinion of value, not to help or hurt your loan.
What happens during the visit
A typical visit takes about an hour, sometimes less. The appraiser walks through the home, measures it, takes photos and notes the condition of the main systems. You can be home, and it often helps to be there to answer questions and let them in.
What the appraiser looks at
- Size, layout and the number of bedrooms and bathrooms
- Condition, age and recent updates such as a new roof, kitchen or HVAC
- The lot, location and features such as a garage or finished basement
- Safety items, such as working smoke detectors and handrails
- Recent sales of similar homes nearby, known as comparables
How to prepare
You don't need to remodel. Focus on making the home easy to see and showing that it's been cared for.
- Clean and declutter so rooms look their true size
- Fix small things: leaky faucets, loose handrails, burnt-out bulbs
- Make sure the attic, basement, crawl space and utility areas are easy to reach
- Write a list of improvements with dates and rough costs
- Share any recent sales nearby that you think are good comparables
If the value comes in low
A low appraisal doesn't necessarily end a refinance. It may mean a smaller loan amount, a smaller cash-out, mortgage insurance or different pricing. Ask your loan consultant about your options.
If you think the appraiser missed something, such as a recent sale or a major update, you can ask for a reconsideration of value. Provide facts, not opinions. Another option is to bring cash to closing to reach the equity you need.
Who pays for the appraisal
With CapCenter's ZERO Closing Costs (restrictions apply), the appraisal fee is covered when an appraisal is required and provided by an approved agent. You still pay for things outside the offer, such as escrow deposits and prepaid interest. See Offer details for what is covered.
