Many home buyers utilize government funded mortgages to purchase their new homes. Government funded mortgages, including USDA mortgages, VA loans and FHA loans require a mandatory home appraisal before the mortgage can be secured and approved. Many times, however, the mortgage process is delayed by complications to this appraisal and home inspection process.
When an appraisal is performed on a property, the appraiser will inspect and review various aspects of the property. These aspects include exterior home features including siding, roofs and foundations, and interior elements like attics, crawlspaces and stairways. If discrepancies are found, the home appraiser will mark the property as ‘subject to repair.’
The mortgage can only be finalized if the property’s discrepancies are corrected. As a result, before the mortgage can be approved, the seller will need to make the repairs and the borrower will need to pay an additional fee, ranging from $100 to $200, for a final inspection in order to ensure the repairs have been made.
By being proactive and making the home ‘appraisal ready’ for inspection, you can help prevent delays during the mortgage process! To do this, you don’t necessarily need to be the seller of the home! Buyers, or their agents, can also help the process by providing information and assistance when necessary.
Looking for ways to ensure that the home appraisal process goes smoothly? Here are three easy tips:
Many times a transaction can be delayed 2 to 3 weeks while simple repairs are made to the subject property, such as correcting chipping paint or fixing missing siding. If these types of issues are addressed before the appraisal is scheduled, it will help the mortgage approval process move along faster.
Sometimes, the delay can be caused by something as simple as the appraiser’s need to inspect the attic or assess the well and septic tank. Both are relatively straightforward tasks if one knows where to look! Before the appraisal, take the time to locate (and clear, if necessary) access to these home features.
Having a listing agent or other representative present during the appraisal process can help to make sure issues are addressed ahead of time and keep the appraisal moving along. Having someone at the property that can help point out things such as the location of the septic tank or the entrance to the attic, or even just be there to hold a ladder for the appraiser if need be, can avoid a ‘subject to repair’ report that is generated simply because an inspection could not be completed successfully.
We’ve compiled a helpful document noting the appraisal requirements for any USDA, VA or FHA financed loans. Sellers and their agents should review this document and ensure that any necessary repairs are made ahead of time, before the home appraisal process begins. Not only will it impress the appraiser as a cared for and well maintained property, it will also make it more visually appealing to possible buyers as well.
This in turn increases the likelihood that the seller’s desired value is attained, both during the offer process and in the final appraisal report. This can also help avoid a last minute renegotiation or a requirement for more cash to close that can occur when the appraised value falls short of the desired amount.
We’ll be happy to provide additional information about how to streamline the mandatory government mortgage home appraisal process and can even help you determine which government funded mortgage option is right for you. Contact us today!
Editor’s Note: This content was originally published in 2014, but has been updated as of February 2021.