|Frequently Asked Questions
Why Get an Appraisal?
One of the most common reason that a residential appraisal is performed is for
mortgage lending purposes, whether it be a purchase or refinance. There are other
times when the services of a licensed, independent appraisal professional might
prove useful such as:
Estate Planning, Liquidation or Divorce-The majority of us do not have professional
financial advisors or executors to handle theses issues. A professional appraiser
can determine the true value of property, and equitable arrangements can more
easily be arrived at among concerned parties.
PMI Removal-A popular money saver for homeowners is to get PMI (Private Mortgage
Insurance) removed from their mortgage loan, thus saving them money on their
monthly payments. PMI is the supplemental insurance that many lenders require
home owners to purchase when the amount being loaned is more than 80 percent
of the value of their home. PMI becomes unnecessary when the remaining balance
of the home loan dips below 80 percent, whether through market appreciation, home
additions or improvements, or principle pay down. Your lender may require an
appraisal to determine the current value of your home for removal of PMI. The United
States congress passed a law in 1998 that requires lenders to remove PMI
payments when the loan-to-value ratio conditions have been met. This law is called
Homeowners Protection Act of 1998.
Appraisal Review-Have you just received a copy of your appraisal and would like to
have a professional check it for accuracy, or do you need a second opinion? A desk
review can verify he accuracy of the data used as well as check the appraisal for
technical correctness. If greater detail is required. A field review provides a physical
exterior inspection of the subject and comparable properties.
Why does the county auditor's value differ from the value that my home has been
recently appraised For?
While the basic idea that the county auditor's value equates to market value is sound.
It is typical for the auditors value and appraised value to differ. The appraiser's data
concerning the subject is more comprehensive than the county since the appraiser
has physically inspected the interior as well as the exterior of the property. This lack
of subject data as well as the characteristics of mass appraisal techniques used by
the county generally accounts for the difference between the recently appraised value
of your home and the value given by the county auditor.
Why is the appraised value of my home different than the insurance replacement
The appraised value is based on market value. What a willing buyer would likely pay
a willing seller under typical market conditions. Replacement cost is the amount
required to build a structure to replace subject property in function and utility.
Since consumers generally pay for the appraisal when applying for a mortgage.
Do they "own" the appraisal.
The appraisal is legally owned by the lender or client when the appraisal is
performed for mortgage lending purposes. However, consumers must be given a
copy of the appraisal report, upon written request, under the Equal Credit Opportunity
Is an appraisal the same as a home inspection?
An appraisal does not serve the same purpose as a home inspection. The appraiser
forms an opinion of value in the appraisal process and resulting report. A home
inspector determines the condition of the home and its major components and
reports these findings.