Can A Real Estate Appraisal Affect Your Home Purchase?

Posted on

The majority of people who purchase homes buy them with mortgage loans. As a result, a buyer depends on the lender's willingness to issue the loan. However, lenders must carefully assess many things before approving loans for people to purchase homes. One of the considerations is the home's appraisal. A real estate appraisal can affect your home purchase, and here is a guide to help you learn more about how this works.

How an appraisal works

An appraisal is a routine service people get when purchasing homes. People might also get appraisals for other purposes, but the main purpose is to learn a home's value before a person buys the house. The person appraising the house must look closely at the home and its features. They'll also consider the home's location, size, and amenities. The appraiser compares the home to other properties and determines how much the house is worth today. When they finish assessing everything, they'll give you and the lender the report that reveals the value.

What lenders look for in appraisals

The lender you're working with views the assessed value of your home before approving the loan. Lenders have no problem issuing loans when home values equal or exceed the purchase price buyers offered. However, they have problems issuing loans if the appraisals are below the purchase price. If this happens, your lender might not issue the loan.

The effects it might have

A low appraisal isn't good for several reasons. First, do you want to pay more for a house than the amount it's worth? Secondly, your lender might not issue the loan because of the low appraisal. If they agree to give you a loan, they might ask for a higher down payment. This happens because lenders generally only issue a percentage of a home's value. Therefore, it often requires the borrower to put more money down. As you can see, the appraisal affects a home purchase, which is vital to know if you're buying a house.

Hire a real estate appraiser today

Are you hoping to buy a house soon? Once you find one you like, you can make an offer to purchase it. After the seller accepts the offer, you must hire a real estate appraiser to tell you its value. Your lender will need to see the report to determine how to proceed with your loan. Contact an appraiser today to schedule a real estate appraisal.