New To Refinance Appraisals? How They Differ — Or Not — From Purchase Appraisals

Is this your first time refinancing a residential property? If so, you may see some differences between this process and the mortgage process when initially buying a house. And one key difference is how an appraisal works. While there are many similarities, there are also some important differences. Here's what you need to know about refinance and purchase appraisals.

1. You're More Involved in Refinance Appraisals

In general, a purchase appraisal is done without the presence of the home buyer. No one may be around, or the seller may be the only one there. That means you don't have an active role in the process. However, most homeowners are involved in the refinance appraisal. This is a good opportunity to make sure the appraiser notes anything that could help you. 

2. The Appraiser May Not Know the Price

With most purchase appraisals, the appraiser has some idea of what the sales price is. This is different from a refinance into which they go blind. In both cases, the value shouldn't be wildly different than if the appraiser approached it the opposite way. But if the purchase appraiser reaches a number similar to the sale price, this is just an indication that it was priced well. 

3. Both Appraisers Have the Same Responsibility

While the details of both types of appraisals vary, the work is much the same. The appraiser must act as a neutral party and look at the structure and the comparative properties evaluated with a trained and unbiased eye. There may be some difference in the resulting numbers, but that doesn't mean either your purchase appraiser or refinance appraiser isn't doing their job. 

4. Appraisals Help You In Different Ways

Most people don't like to pay extra money for what's already a big investment. But both refinance and purchase appraisals benefit you in important ways. A purchase appraisal goes a long way toward ensuring you don't have any costly surprises later and that you don't overpay. The refinance appraisal is your chance to get the highest value and therefore the best loan. 

5. You Can Get a Voluntary Appraisal

Even though most homeowners get a refinance appraisal because the lender requires it, you can get one voluntarily. This can be very helpful if you have reason to believe that the property is being undervalued by the lender. An appraisal is a chance to try for a higher value. This gives you a better shot at lower rates, more loan options, and avoiding private mortgage insurance. 

Where Can You Learn More?

Could you benefit from a refinance appraisal? Do you need to order one for the lender? Start by meeting with a professional residential property appraiser in your area today. With their help, you'll move forward with your new loan in confidence and security.

Share