Are you planning to refinance your home soon? The process is similar to what you experienced when you took out your current mortgage. Most lenders will require an appraisal before you close on the new loan. While market conditions play a significant role in how much your home is worth, there are actions you can take to possibly get a more favorable appraisal.
Read on to discover what appraisers look for, how to maximize your home value for a higher valuation and what could happen if the appraisal comes in low.
What Do Home Appraisers Look For When Refinancing Your House?
See here the most common things home appraisers may look into when refinancing your home loan:
- Exterior: Does your home have curb appeal? Is the exterior well-kept or in dire need of improvements or repairs?
- Interior: Is the interior of your home decluttered, organized and in stellar condition, or does it need work? Are the systems and appliances fully-functional? How are the flooring and walls?
- Location: Is your home close to schools, stores, gyms, the interstate or other businesses? Are there noisy streets or train tracks nearby?
- Size: How many square feet is your home? What’s the floor plan? How many bedrooms and bathrooms are inside?
- Home Improvements and Amenities: Have you made any additional improvements to the home? Are there amenities in your home, like a swimming pool or outdoor kitchen, that make it a more desirable place to live?
- Any Negative Features: Anything and everything that can have a negative effect on the value of your home.
Can You Fail a Home Refinance Appraisal?
It’s impossible to fail a home refinance appraisal. However, it could come in low, which can be problematic for a few reasons. If you are seeking a cash-out refinance, you’ll likely have to pull out less than you intended to.
There are also instances where you may be denied refinancing altogether. This typically happens when the appraised value of your home is less than what you owe on the mortgage, which means the property is underwater. In this case, you’ll have to hold off until property values increase in your area, you make improvements to your home or both.
Ways to Maximize Your Home Value For a Higher Valuation
If you are looking into home additions or repairs that could increase your home value, these are some things you could do:
Fix Major Problems
Are there broken appliances, fixtures or systems in your home? If possible, have them repaired before the appraisal to improve your chances of receiving a higher valuation.
Repaint
One of the main ways you can improve the appearance of your home’s exterior and interior is to apply a fresh coat of paint. You can always do it yourself or have a professional repaint the property for you. Either way, it’s a small investment that can really pay off.
Document Home Improvements
Make a list of all the upgrades you make to the home and leave it on the counter for the appraiser to review when they arrive. This is especially important if you’ve completed projects that aren’t easily noticeable but warrant the appraiser’s attention.
Cleaning Up
Consider tidying up your home before the appraisal. You can hire a cleaning service or do it on your own and don’t forget to remove items you no longer need to clear the clutter. If time permits, organize items throughout the home to make it more appealing. Also, have the carpets and hardwood floors professionally cleaned or polished.
Removing Unattractive Features
This can include dated landscaping or features in the interior of your home that are no longer appealing.
