Mortgage Process Step #2

Appraisal Stage

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Understanding Residential

Real Estate Appraisals

Understanding Residential Real Estate 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.

Mortgage Loan Process

Step 1: Documentation

Step 2: Appraisal

Step 3: Underwriting

Step 4: Conditional Approval

Step 5: Clear To Close

Step 6: Closing

Please feel free to contact us at any time if you have any questions about your loan status or next steps in the process.

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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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