Why Do I Need an Appraisal to Buy a Home?

As a first time homebuyer, you might wonder the reasoning behind many of the tasks you are expected to complete in order to obtain a mortgage or loan and take possession of the home. Being required to have your new home appraised is often seen as the most questionable necessity. However, from the perspective of a financial institution, a new home appraisal provides vital information on the home’s true worth.

In the eyes of a lending agency, the home appraisal is a necessity. It reveals how much your potential home is worth in its current condition and often serves as a collateral value for the loan itself. If a problem is discovered during the inspection and appraisal, the bank will often change the conditions of a loan guarantee or drop out of the deal altogether. This can happen even if you were prequalified for a specific amount. On the other hand, a home that is valued for more than the mortgage loan is approved for makes the deal that much sweeter for lending companies that look to make a large profit should foreclosure become necessary.

To maximize the benefits of a home appraisal, you can have your dream home inspected and appraised before you decide how much to request on a mortgage loan. This will ensure that what you get for the loan matches the value of the home and gives you the most potential for a successful home buying experience. Unless you have previously agreed otherwise, the home appraisal fee, which usually costs between $200-$400, is your responsibility.

Have further questions, or interested in getting started in the pre-approval process? Visit our Financing Page. Our preferred lender can help you get started in making your dream home come true. Click Here to learn more.

Contact us

919.934.7788
104 Airport Industrial Drive, Ste. 101
Clayton, NC 27520

Follow us

2018 © Gray Wolf Homes
Top