The home refinancing process is often intimidating for many people. However, when conducted carefully, refinancing can produce great results. It’s important to know that a home appraisal is a key component of the mortgage refinance process as well as, what does an appraiser look for when refinancing. A home appraisal is a certified or licensed third-party professional’s opinion of a property’s value. Appraisals are generally conducted for tax-related purposes or in order to establish a potential selling price for a home.
According to the Appraisal Institute, there were 78,105 active real estate appraisers in the United States as of Dec. 31, 2018, a figure that marks a 5% decrease compared to 2017.
Top Considerations Appraisers Are Looking At During Refinancing
If your property’s value is below a certain threshold, you likely won’t be able to refinance. Should an appraisal estimate your home equity is less than 20%, you could end up paying for private mortgage insurance (PMI) or be forced into a cash-in refinance. You may also not receive a low interest rate due to your status as a higher-risk borrower.
There are five primary considerations an appraiser will look at during the home refinancing process. Let’s analyze these closely.
Exterior & Interior Condition
One of the first factors appraisers consider when calculating a property’s value is perhaps the most evident one: the overall condition of both the home’s exterior and interior. If your property appears unclean and dilapidated, (e.g. peeling paint, holes and stray marks on walls, surfaces covered in dust, etc.) it will likely give off a highly negative first impression. Therefore, you should always strive to ensure that your home looks as tidy as possible.
Total Room Count
The size of a home is always a factor when estimating its value. This entails that a two-bedroom house and a five-bedroom home will have notably different selling prices. Again, you should verify that every bedroom in your home has been cleaned before your appraiser arrives.
Any Improvements Made
If any improvements have been made to bathrooms and kitchens, your roof, or windows, your appraiser will also take these into account. Updates to your home’s plumbing, heating/cooling, or electrical systems also count as “improvements” that will affect property value.
Condition & Age Of Home Systems
A home whose electrical, plumbing, and heating systems are more than 10 years old and haven’t been updated will not be assigned the same value as a property with more advanced systems that have been regularly improved over the years. Leaks and corroded pipes can be severe issues. Although it may initially seem like a costly investment, keeping these systems in good condition will ultimately lead to significant returns in the form of an increased value for your home.
If your property includes any unappealing features, such as exterior or interior structures with clashing patterns or colors, this will also negatively impact its value when the time for an appraisal comes. Even an exterior appearance that is notably different from every other house in your neighborhood can be deemed “unappealing.” A lack of landscaping, for instance, can create a negative impression.
A home is a valuable asset that will one day be inhabited by other people. Therefore, it’s important to treat it with care and not let any part of it become dirty or go to waste.
Contact A Knowledgeable Refinancing Team For More Info On What Does An Appraiser Look For When Refinancing
Speak to the experts at Mathis Title Company in Fairfax, Virginia for more information about considerations a home appraiser looks at during a refinance. We are proud to provide both real estate settlement services and legal advice to homebuyers, sellers, and lenders throughout Fairfax County.
Robin Mathis is an attorney with more than 35 years of experience and who was sworn into the U.S. Supreme Court. She has extensive knowledge of both the buyer and seller sides of real estate transactions and has performed thousands of closings (small commercial and residential).
Mathis Title’s team will always guide you through every step of the homebuying process, through closing in a personalized way. If you are seeking to refinance, we will help you negotiate mortgage contracts and do everything we can in order to ensure that your refinance is successful. Refinancing can be beneficial for several reasons, including lower monthly payments, eliminating PMI, and even potentially reducing the length of your loan. Call Mathis Title Company today at (703) 214-4020 or contact us online to learn more about our refinancing and title insurance services.