Four Great Benefits of an Appraisal

4 Benefits Of Appraisal

Summary: An appraisal tries to accurately reflect the market value of a home. If homeowners are purchasing or refinancing, an appraisal holds great benefits. Four benefits of an appraisal are: knowing your home value, removing additional mortgage costs, tapping into your equity, and room for negotiation.

Before you apply for a home mortgage loan and buy a house, consider an appraisal. Here are four benefits of getting an appraisal:

  1. Know Your Home Value
    Appraisals are important when you are purchasing a new home or refinancing your existing home. Knowing your home value is crucial, as it determines your loan amount and validates a seller’s asking price when you are purchasing.
  2. Remove Additional Mortgage Costs
    If you are refinancing, an appraisal can help to remove certain additional costs. If your home comes back with a higher value, it can increase the equity within your home. If your equity is above 20%, you can request your mortgage lender to remove your Private Mortgage Insurance saving you money off your monthly mortgage payment.
  3. Tap Into Your Equity
    An appraisal while refinancing determines your home’s equity. If the appraisal reveals you have enough equity within your home, you can take advantage of a cash-out refinance. With a cash-out refinance you are using your home’s equity to refinance and take cash out. Utilizing your home’s equity can put thousands of dollars back into your pocket allowing you to pay off debts or renovate!
  4. Room for Negotiation
    If you are purchasing a home and the appraisal reports the home value as less than the listing price, you have room to negotiate for a lower price. The appraisal ensures buyers are purchasing homes for what they are worth and not overpaying.

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