And lately it’s driving homeowners to place the blame on someone… anyone… and that blame typically falls on their mortgage company or their mortgage banker. But are they the ones at fault? Is the blame game warranted? Who exactly IS at fault when it comes to a less-than-desirable valuation? And what IS a home appraisal based on?
A Mortgage Company without Mortgages?
Here’s the thing. Mortgage companies and mortgage bankers actually have nothing to do with the appraisal process. Appraisals are typically handled through the title company and appraisers are often selected from a network of appraisers with which the title company is affiliated. They’re an unaffiliated third party. Often times, there’s confusion because the homeowner is informed about the cost of the appraisal by the mortgage company/banker, when actually there is no mutually beneficial relationship.
So if an appraiser sets a value on your home that comes in too low to move forward with the home loan, the mortgage company nor the mortgage banker can benefit in any way. Mortgage companies need mortgages to stay afloat and if they can’t close your loan, there’s no mortgage to benefit from. What about the mortgage bankers? Are they to blame? Similarly, mortgage bankers don’t benefit until they close a loan… a loan that can’t be processed with a low appraisal. Which leads us to our first answer: Mortgage companies and mortgage bankers are in no way affiliated with the value of your appraisal or the appraiser selected for your home.
Who is to blame? Unfortunately there’s no real person to yell at. The current nationwide trend of decreasing home values is to blame. Right now, home values in some locations are appraising at 40% under the price at which they initially sold. A fact that pretty much benches the players in our blame game.
What is an Appraisal Based On?
Good question. Really good, actually. Most people don’t know a lot of the little things that go into the value that the appraiser gives your home. Things like built-in appliances and surrounding home values affect your homes appraisal, but did you know that cleanliness does not? Or that a finished basement cannot be included in your home’s square footage?
You can find out everything you want to know about what goes into your home’s appraisal by watching a LIVE walk-through by a real appraiser ! See what counts most in each part of your home:
- Real Estate Appraisal – Introduction to Appraisals and the Entry Way
- Real Estate Appraisal – Kitchen and Basement Appraisal Walk Through
- Real Estate Appraisal – Furnace, Bedrooms and Bathrooms With the Appraiser
- Real Estate Appraisal – Upper Levels of the Home and Home Overview
- Real Estate Appraisal – Outside the Home and Appraisal Comparables
- Learn more about refinancing a mortgage.
- Learn everything you need to know about buying a home – all the steps from day one to closing.
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