The threshold for when an appraisal is required on the purchase of a home could be changing.
A new rule, which still needs to be signed by the Federal Reserve, would require that home loans on houses sold for $400,000 or less may not require an appraisal, according to Mortgage News Daily. The current threshold is $250,000.
Should the rule take effect, it would be the first time the appraisal limit has been increased in a quarter century, according to Mortgage News Daily.
If you are a prospective Fort Collins homeowner, you may not even be aware of what an appraisal is. If that is the case, we break it down below.
A home appraisal is a price estimate conducted by a licensed appraiser. This estimate will be used to determine the home’s true market value so all parties are aware.
A home appraisal is not the same things as a home inspection
A home inspection is to determine the home’s physical state and if there are any defaults with it, which could impact the purchase price and/or loan eligibility. A home appraisal is meant to calculate what the home is worth.
What is analyzed
During an appraisal, the licensed appraiser will look at thing like the condition of the walls, roof, exterior, etc. They will get a proper measurement of the square footage and number of bathrooms and bedrooms, and a variety of other things. Keep in mind, how clean the home is will not play a factor because clutter and cleanliness does not determine a home’s value.
If you have any questions about an appraisal when purchasing a home in the Fort Collins area, we would be happy to help. We have vast experience in the area and a strong reputation. It would be an honor to help you try to get a pre-approval.
Contact us today.