Purchasing a new home is a significant investment, which is why you should have a clear understanding of a property’s worth before committing to buy it. The easiest way for potential buyers to find this answer is by scheduling a house appraisal. Here are some of the ways calling in an expert can help.

3 Ways House Hunters Benefit From Home Appraisals

1. Get Mortgage Approval

When borrowing money for a house, many mortgage companies will reject applications when a home appraisal isn’t performed. This is because the lender doesn’t want to loan more money than the property is worth. And while this might seem restrictive, this is often in your best interests, too.  Please understand however, if you are working with a lender / bank / Credit Union … As part of the loan process, they will be the ordering party for the appraisal.  You will be unable to order your own appraisal, and if you do, in all likeliness, the bank will not accept the it and you will be out the cost of that appraisal.  

2. Stop PMI Payments Faster

When a borrower can only make a down payment of 20% or less of the purchase price of a house, the lender will require private mortgage insurance (PMI). The payments are often incorporated into monthly mortgage rates. The lender must eliminate this insurance requirement when the remaining loan balance falls under 80% of the home’s value. By scheduling an appraisal, you’ll have a better understanding of when the loan-to-value conditions will be met, so you can work toward the removal of the PMI faster. 

3. Gain Leverage During Negotiations

A home appraisal will address any issues that impact the current value of the property. For example, the appraisal may determine that the house is over priced for the area. Having this knowledge will give you more room for negotiations when finalizing the transaction. You would then be able to ask the seller to lower the selling price based upon the appraised value.

If you need an appraisal before buying a home, contact Concept Appraisal Services. Based in Littleton, CO, the certified and licensed appraiser Connie Jo Esbenson will help determine the value of the property. To learn more about their services available in Arapahoe, Douglas, Denver, and Jefferson counties, call (303) 506-6254 or visit the company online to request a free quote.