If you’re hoping to refinance the mortgage on your home, there’s one big roadblock between you and that lower rate: the home appraisal. If your estimate is low, you might not be aware to resist at all, or you might be facing less-than -optimal loan terms, including potentially paying for private mortgage insurance. If your appraisal results in a higher assessment, you’ll quite likely have more loan options available to you — often with lower interest and better payments.
To start your refinance preparation, make sure your home is clean (inside and out). Refinancers are human, after all, and can be swayed by how pristine (read: well-cared-for) a home looks.
The list follows five more home appraisal tips to ensure your home appraises as high as possible:
Make those small repairs you’ve been postponing
Your house isn’t going to morph into a mega-mansion overnight, so some of the considerations for an appraisal (such as the number of rooms, square footage, and location) aren’t negotiable. But you can make the most of your home’s features. “Make sure that all the major systems have been serviced and that everything in the home appears to be maintained and functional,” says Ingrid Vincent, a Rhode Island and southern Massachusetts real estate agent. For refinancers, the condition of a home often matters more than the year it was built. Tackle any DIY home projects that you’ve put off.
Enhance your home’s curb appeal
You might have least attention for your home’s exterior, especially if you typically enter and exit through the garage or a side door. But curb appeal matters to potential buyers, and it matters to appraisers too. The Appraisal Institute states that properly maintained landscaping can enrich a home’s value both monetarily and aesthetically.
Create a file of all recent improvements, upgrades, and tax documents
If expend any money on your home, save all your receipts and keep them in a filing cabinet. It’s also a good idea to take before-and-after photographs of any improvements and upgrades. By staying organized, you can always prove to the refinancer what you did to improve and upgrade your home, and how much you spent. Also be sure to include documentation for any permits that were pulled as part of home improvement projects.
Know the comps in your area
One of the best ways to find out the actual value of your home is to compare it with similar homes nearby that have recently sold. If you know the comps as well as or better than the appraiser, you can challenge any lowball comps they might use. “Instead, here’s the approach Shulman suggests: “Go to your local county offices and find out exactly what properties have sold in your area in the last six months and then go see them in person.” Too labour-intensive? Trulia makes it easy to find recently sold homes with a quick property search (like this one for recently sold homes in Charlotte, NC). “You might find out that the property with the lowest sale price was a teardown,” Shulman says — and that’s the type of information appraisers can use to best evaluate your property.
Don’t be pushy
To present the appraiser with all the great information you’ve gathered, you need to do so diplomatically, or all your efforts could be wasted. “Meet the refinancer, and be as nice as possible but not overbearing,” says Antonia Barry, a Maryland broker. “State that you have some information to share with them before they get started.” You would then go over your Intel (don’t forget to mention the brand-new shopping centre nearby) and then let them do their job undisturbed. If you hover, the appraiser might wonder what you’re trying to hide.