You are not alone if you are looking to refinance your mortgage. Your current interest rate and monthly payment can be lowered by refinancing, and there is also the opportunity to borrow cash from your equity for debt consolidation, home renovations, and some other purposes.
Getting approved for refinancing, however, is only the initial step. A lender may not give more than the value of a house, so lenders need to have the property’s value assessed by a home appraiser.
When assessing the value of a house, an appraiser takes many factors into account. While the square footage or the number of rooms in your house can not be increased on short notice, these home appraisal tips can be followed to make your home appraise higher.
Make a Good First Impression—Starting With the Outside
An appraiser not only evaluates your home’s interior state, but he also examines the exterior. And, sadly, if you neglect the exterior of your house, the property will be less valuable. The appraiser could subtract hundreds of thousands from the value of your home if your yard is messy and unkempt, and if the exterior structure needs maintenance.
Prepare for a visit by the appraiser and tidy up your yard. To give it a fresh look, repair any loose shutters, fix missing roof shingles, and power wash the house.
Spend Money on Improvements That Pay Off
Not only do kitchens and bathrooms sell houses, but upgrading these spaces adds thousands to the value of your home, which is a big plus whether you refinance or sell. Of course, there is no time for a complete overhaul of your bathrooms or kitchen if an appraiser is expected to visit your home in the next couple of days.
Also minor improvements to these spaces, though, will help increase your home appraisal. You may replace dated sinks, light fixtures, and faucets, for starters. Upgrade the room with newer appliances, wood floors, a decorative backsplash, and new countertops if you have time.
Create a File of All Improvements, Upgrades, and Tax Documents
Save all your receipts and keep them in a filing cabinet if you spend any money on your house. Or digitize and save the documents on your computer. Before-and-after photos of any enhancements and upgrades are also a smart idea.
You can reasonably claim to the appraiser what you did to improve and upgrade your house, and how much you spent, by becoming organized. Also, make sure to provide paperwork for any permits that have been taken as part of projects for home renovation.
Research Comparables
Comparables are homes that are close to yours in your neighborhood. Typically, they have the same number of bedrooms and bathrooms as your house, are in a nearby site, and have similar square footage overall.
Comparable analysis lets you get a better understanding of what your home is worth and whether you should expect a fair appraisal. If the final number comes out lower than expected, you may also use this information to challenge the assessment.
Check out your local county offices to find which properties have been sold in six months. Try comparing properties that are like yours and take note of the final prices of their sales. To compare properties in your area, you can also use online real estate databases.
Conclusion
A significant aspect of every refinancing is the appraisal. Appraisals guarantee lenders that more money than your home is worth is not being loaned to you. It indicates that you want your appraisal to come back as high as you want to. Fortunately, there are a few steps that you can take to increase the odds of a fair evaluation, such as the ones above.