Thursday, July 28, 2022

When is it necessary to do a home appraisal for the mortgage?

When we are going to apply for a mortgage, the appraisal is a big procedure, but also in other processes related to the mortgage itself or the house. Here we are going to see all the keys to take into account.

What is a home appraisal?

The first thing to know is what a home appraisal is. The appraisal is the estimate of the market price of real estate at a given time.
An appropriately qualified technician is the one who must carry out this evaluation. The technician must take into account all aspects related to the house, such as the size of the house, the facilities it has, the state of the house and its elements, the area in which it is located and its current market situation. property at the specific moment in which the appraisal is carried out. In this way, the real and objective price of a home is known, and it can be used as a guarantee reference to apply for a mortgage loan.

How long does an appraisal take?
It is important to keep in mind that an appraisal is a procedure with an expiration date, it is a procedure that expires in 6 months. That is, once an appraisal has been made, the value given by the technician will only be valid for the following 6 months.
Why? It is considered that after this time the conditions of the house and the environment have been able to change and therefore also its price.

How is a home appraised?
The valuation of a real estate appraisal is carried out following a series of certain patterns and in the most objective way possible. For this reason, it is necessary for a qualified technician to carry it out.
There are 3 key elements to take into account when appraising a home:
• The characteristics of the house itself.
• Location of the home.
• Real estate market situation at the time of the appraisal.

When is a home appraisal necessary?
• When you are going to apply for a new mortgage.
• When you are going to apply for a mortgage extension.
• In some cases of novation or subrogation of the mortgage.
• When you want to use a property or real estate as collateral.
• In case of repossession of the home.

How long does the bank take to appraise a mortgage?
Approximately, the appraisal process can take between 1 or 2 weeks from the moment the appraisal is requested.

Who pays for a home appraisal?
As a general rule, the person who pays the appraisal costs is the buyer of the house, that is, the mortgage applicant.

What if the appraisal is higher than the purchase price?

Banks, when granting a mortgage, take the appraisal price as a reference and not the purchase price of the home. In this way, if the appraisal is higher than the purchase price, it may be the case that a bank grants the mortgage at a price higher than what we will need to make the purchase. In general terms, entities usually finance up to 80% of the lower of the two amounts.
The most advisable, although you can request a mortgage without having previous savings, is to have a previous sum of money that is around 20% or 30% of the total value of the appraisal.

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