A home valuation is a required part of any remortgage application process. The home valuation, or appraisal, is necessary so a lender knows the market value for the property they are considering lending money on. The market value of the property will then be used to calculate the loan to value ratio and the amount of risk they are taking on, among other things.
There are several pieces of information which are gathered by a home appraiser during their evaluation. First, they will visit the property for the physical inspection. During initial examination the outside structure of the house will be checked for any cracks in the foundation or degradation of the materials making up the overall structure.
They will then require full access to every room in the house, as they will collect measurements and calculate the official amount of square footage in the home. Careful consideration will also be made to any new additions or renovations which have taken place. Make sure the appraiser is made aware of any changes which have been made to the home which could lead to a better overall appraisal. The original plans of the house should be discussed when the appraiser comes for the appraisal. Make sure the appraiser has knowledge of what the house included when the house was first built compared to the condition it is in now.
The appraiser will use the information he or she gathered during the physical inspection to put together a full report. This report will include details about condition of every part of the home, square footage, and description about the plot of land the home sits on. Additionally, the appraiser will use their collected data compared with data about other homes in the area to arrive at a market value for the property being remortgaged. The appraised value is not the selling price of the property, just what it would cost someone to replace the property by today’s standard costs of materials, fixtures, etc.
The appraised figure is used be the lender as a way to calculate the amount of equity you have in your home. The figure will also be used to determine the amount of remortgage home loan you qualify for.
The appraisal is an important part of the overall remortgage process. Make certain when the appraisal is close to making the official inspection of your property that things are in order and looking their best. A first impression makes a lasting one. If there are flowers around the house, make sure they are all thriving and colorful, not dead and uncared for. Also, little things like the grass being at the correct height, paint looking fresh, and the inside of the house looking organized and tidy will make a difference in the end.
Lenders have a list of appraisers they typically use for all the properties they go into negotiations on. These appraisers are contracted and an unbiased part of the valuation process.
