How to Avoid a Low Home Appraisal

When refinancing a home loan, one of the most important aspects of being approved for a new mortgage is having enough equity in your home.   While you may have put forth a large down payment when you initially purchased the home and have paid down a portion of your balance since loan origination, there is a chance that your home has declined in value to the point where you would no longer qualify for the refinance.  To prove the value of your home, all mortgage lenders will order a new appraisal.   While the value of a home is often determined by market conditions, there are several things you can do to avoid a low appraisal.

The first thing you can do to avoid a low appraisal is to hire your own appraiser.  While most lenders will be able to refer you to an appraiser, they may not choose an appraiser that has your best interests in mind.   Choose an appraiser that has a reputation for coming up with favorable price points for their clients.   Not only would this possibly get you a better value on your home, but it will give you more flexibility in negotiating the cost of the appraisal.�  Keep in mind that the appraisal will need to be approved by the bank so it is important to ensure that the appraiser is licensed and his work will be accepted by the bank.

The next thing that you can do to avoid a low appraisal is to complete any projects that you have started in your home.  The appraiser will walk through your entire home and assess both the condition of your home as well as the quality of the improvements. If the appraiser notices that there are a lot of uncompleted projects, or noticeable defects with the home, then your appraised value will be lower than it would be otherwise.  By completing the projects, you could cause a noticeable increase to the value of your home.

The third thing that you can do to avoid a low appraisal is to perform your own research on market conditions. Prior to ordering an appraisal you should review recent home sales in your neighborhood as well as other homes that are listed in the market.   By doing this, you should be able to get a good understanding of how your home compares to the comparable homes and determine the value of your home.   If the appraiser comes in with a lower value than you are expecting and did not utilize the same information as you did, you may be able to get your appraised value increased by presenting the appraiser with your research.