Boost Your Home Appraisal Value with These Easy Tips

Whether buying a new home or refinancing your current one, a home appraisal is a critical step in the mortgage process. But the appraisal process can feel confusing and even a little intimidating if you’re like most homebuyers or homeowners. Don’t worry—we’ve got you covered!

In this guide, we’ll break down everything you need to know about home appraisals, from how they work to recent changes in 2024 that could impact your mortgage. We’ll also share simple tips to help you get the highest possible appraisal value, which can save you money or increase the cash you get from refinancing. Let’s dive in!

What Is a Home Appraisal and Why Is It Important?

When you buy or refinance a home, the lender must ensure the property is worth the money they lend you. This is where a home appraisal comes in.

An appraisal is an expert’s estimate of the property’s value based on factors like its condition, size, location, and recent sales of similar homes in the area.

Lenders rely on this report to ensure they’re not lending more than the home is worth. If the appraisal comes in too low, it could affect your loan amount or even stop the sale altogether. So, getting a solid home appraisal is crucial whether you’re buying your dream home or lowering your mortgage payments through refinancing. Speak With Our Loan Officer for Mortgage Loans

The Home Appraisal Process in 2024: What to Expect

In 2024, the home appraisal process is smoother and more technology-driven than ever. Lenders typically order an appraisal through a third-party service called an appraisal management company (AMC). This ensures that the appraiser is unbiased and works independently from the lender or the seller.

Here’s a quick look at the steps:

1. Lender Orders the Appraisal: Once you submit a mortgage application, the lender will request an appraisal from an AMC.
2. Appraiser Visits the Property: Depending on your loan type, the appraiser may visit your home in person, do a drive-by appraisal, or use online data for a desktop appraisal.
3. Appraiser Evaluates the Property: The appraiser will assess your home’s size, condition, and any recent upgrades, then compare it to similar homes in your neighborhood that have recently sold.
4. Appraisal Report is Sent to the Lender: The appraiser delivers a detailed report to your lender, which includes the property’s estimated market value.
5. Lender Reviews the Appraisal: Your lender uses the report to confirm they’re lending based on the property’s true value.

How COVID-19 Changed Home Appraisals—and What’s Stayed the Same

During the pandemic, significant changes were made to the home appraisal process to keep everyone safe. While some of those changes have remained, others have gone back to normal as the market stabilizes.

Here’s what’s still in place in 2024:

• Desktop Appraisals: For certain loans, appraisers can complete a report without visiting the property. Instead, they rely on data from previous sales and online sources.
• Drive-By Appraisals: Instead of going inside, some appraisers look at the home’s exterior. This option was originally introduced to reduce contact during COVID-19 and remains a choice for certain loan types today.

Types of Home Appraisals in 2024

When you need a home appraisal, it’s helpful to know the different types available. The right option for you will depend on your loan type and the property’s condition.

1. Full Appraisal: This is the most thorough type of appraisal, where the appraiser visits the property in person and inspects everything—from the interior to the exterior. They’ll look at the number of bedrooms and bathrooms and any recent updates. This is the most common option for home purchases.
2. Desktop Appraisal: Lenders may accept a desktop appraisal for refinance loans and certain low-risk loans. In this case, the appraiser evaluates the property remotely using public records and data from previous sales.
3. Drive-By Appraisal: Sometimes, appraisers only review the exterior of the home without going inside. They’ll take photos of the exterior and check the neighborhood, but they won’t assess the interior. This type of appraisal is common for refinancing in low-risk scenarios.
4. Appraisal Waiver: You may not need an appraisal at all! If you have a lot of equity and excellent credit, Fannie Mae or Freddie Mac may allow you to skip the appraisal entirely, saving you time and money.

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Why You Need a High Appraisal Value

The higher your home’s appraised value, the better the terms of your mortgage can be—especially if you’re refinancing. Here’s why:

• Lower Interest Rates: A high appraisal can lower your loan-to-value ratio (LTV), which may qualify you for a better interest rate.
• More Cash for You: If you’re doing a cash-out refinance, a higher appraisal means you can borrow more money for home improvements, debt consolidation, or other expenses.
• Better Loan Terms: Even if you’re not refinancing, a higher home value could give you more leverage in negotiations during the buying process.

How to Increase Your Home’s Appraised Value

If you’re preparing for a home appraisal, a little effort can go a long way in boosting your home’s value. Here are some tips to get the highest possible appraisal:

1. Declutter and Clean: A clean, organized home looks more appealing to buyers and can create a positive impression. While clutter won’t affect the actual value, it can influence the appraiser’s overall perception of your home.
2. Make Minor Repairs: Fix any noticeable issues, such as leaky faucets, broken light fixtures, or cracked tiles. Small improvements can make a big difference in the appraiser’s report.
3. Highlight Recent Upgrades: If you’ve renovated your kitchen, replaced the roof, or added new flooring, point this out to the appraiser. Upgrades can add significant value.
4. Boost Curb Appeal: First impressions matter! Simple landscaping, a fresh coat of paint on the front door, and tidy walkways can enhance your home’s exterior and raise its value.
5. Provide Comparables: If you know of homes in your area that have sold recently for a high price, provide this information to the appraiser. It could help them justify a higher value for your property.

Common Issues That Lower Your Home Appraisal

While you want your appraisal to come in high, some factors can drag down your home’s value:

• Outdated Interiors: Old kitchens, bathrooms, worn-out flooring, and dated fixtures can lower appraised value.
• Deferred Maintenance: If your home has obvious issues like peeling paint, a cracked driveway, or broken windows, these problems will be noted and could reduce your home’s value.
• Neighborhood Decline: Appraisers look at nearby homes to determine your property’s value. If homes in your area sell for low prices, it could impact your appraisal.

Updated Appraisal Guidelines for FHA, VA, and Conventional Loans in 2024

Different types of loans have specific appraisal requirements. Let’s break down the updated rules for FHA, VA, and Conventional loans in 2024.

Conventional Loans (Fannie Mae and Freddie Mac)

For Conventional Loans, lenders can use desktop, drive-by, or full appraisals. You may even qualify for an appraisal waiver if you have a strong financial profile.

FHA Loans

A full appraisal is generally required with FHA Loans, but during the pandemic, the FHA introduced options for drive-by appraisals. These are still available in certain cases but are less common as the market stabilizes.

VA Loans

VA loans also allow for desktop appraisals and drive-by appraisals in specific situations, such as during stay-at-home orders or when safety is a concern. VA IRRRL loans, which are streamlined refinances, often don’t require any appraisal at all!

How Much Does a Home Appraisal Cost in 2024?

The price of a home appraisal is determined by the size of your house, the intricacy of the property, and your location. Typically, you should budget between $300 and $600 for a basic appraisal. Nevertheless, more intricate properties or located in high-cost areas may incur higher expenses.

If you’re refinancing and qualify for an appraisal waiver, you can skip this cost altogether! Click Here To Apply For Mortgage Loans Today

Can You Dispute a Low Home Appraisal?

If your home appraisal comes in lower than expected, don’t panic. You have options! You can:

• Request a Reconsideration: Provide additional data or comparable sales that support a higher value.
• Order a Second Appraisal: If the first appraiser missed key factors, your lender may agree to a second opinion.
• Renegotiate the Sale Price: If you’re buying, a low appraisal gives you leverage to negotiate a lower price with the seller.

Final Thoughts: The Importance of a Home Appraisal in 2024

Home appraisal is a key step in securing your mortgage, whether buying a new home or refinancing your current one. With updated guidelines and more flexible options like desktop appraisals and appraisal waivers, the process is easier than ever.

Understanding how the appraisal process works and taking a few simple steps to prepare your home can maximize your property’s value and ensure a smooth mortgage process.

If you’re ready to start your mortgage or refinance, our team of experts at Non-QM Mortgage Lenders is here to help. We specialize in loans without lender overlays and can guide you through every step of the process. Contact us today at 262-716-8151 or gcho@gustancho.com—we’re available seven days a week to answer your questions and help you reach your homeownership goals!

FAQs About “Boost Your Home Appraisal Value with These Easy Tips:”

• 1. What is a home appraisal? A home appraisal is an expert’s estimate of your home’s value. It’s based on factors like the property’s condition, size, location, and recent sales of similar homes nearby. Lenders use appraisals to ensure they’re lending the right amount of money for the home’s true value.
• 2. Why do I need a home appraisal when buying or refinancing a home? Lenders require a home appraisal to ensure the property’s value matches the loan amount. This is a precautionary measure to safeguard the lender in the event that you are unable to repay the loan, as they need to guarantee that they can recover the loan amount by selling the property if necessary.
• 3. How does the home appraisal process work? When you request a mortgage, the lender will send a home appraiser to evaluate your property and establish its value. The appraiser will compare your home with similar properties to determine its valuation.
• 4. What types of home appraisals are available? In 2024, the main types of appraisals include:
  • Full appraisals (where the appraiser visits your home).
  • Desktop appraisals (done remotely using data).
  • Drive-by appraisals (assessing only the exterior).
  • Appraisal waivers (where no appraisal is needed if you qualify).
• 5. How much does a home appraisal cost? A typical home appraisal costs between $300 and $600, depending on the property’s size, complexity, and location. More complex homes or those in high-cost areas may have higher fees.
• 6. What can I do to increase my home’s appraisal value? To boost your home’s appraisal value, clean and declutter the home, make minor repairs, highlight any recent upgrades, improve your home’s curb appeal, and provide comparables (similar homes that sold recently for higher prices) to the appraiser.
• 7. What happens if my home appraisal comes in too low? If your home appraisal is lower than expected, you can request a reconsideration by providing additional data, order a second appraisal, or renegotiate the sale price if you’re buying the home.
• 8. Can I get a mortgage without a home appraisal? Yes, if you have strong credit, a lot of equity, and a good financial profile, Fannie Mae or Freddie Mac may offer you an appraisal waiver, which means you can skip the appraisal process.
• 9. How did COVID-19 change the home appraisal process? During the pandemic, desktop and drive-by appraisals became more common to reduce contact. These changes have stayed in place for certain loans in 2024, allowing appraisals to be done remotely or with limited interaction.
• 10. What’s the difference between a full appraisal and a drive-by appraisal? A full appraisal involves the appraiser inspecting both the interior and exterior of your home. In contrast, a drive-by appraisal only assesses the outside of the home. Full appraisals are more detailed and common for purchases, whereas drive-by appraisals are often used for refinances.

This blog about the waiting period after foreclosure requirements for borrowers on title but not on mortgage was updated on September 11th, 2024. Speak With Our Loan Officer for Mortgage Loans