Home Appraisal Process | Mortgage Loans | Bank of America

The Home Appraisal Process

If you're buying a home and your offer has been accepted, the next step is applying for your mortgage. As part of that process your lender will order a home Glossary Term:appraisal layer, which gives you a trained professional’s point of view on the Glossary Term:fair market value layer of the home to make sure the home’s value supports the purchase price.

Who orders the appraisal?

Your lender will order the appraisal to be performed by a licensed appraiser. Borrowers are typically required to pay for the appraisal, and the cost will appear on the Glossary Term:HUD-1 layer closing document as part of your Glossary Term:closing costs layer.

What happens at the appraisal?

For a home purchase, an on-site appraisal is needed for the mortgage to be approved. Appraisers consider:

• Glossary Term:Comparable layer properties that have sold recently, similar in size and location to the home you are buying; their sale prices are usually the most important factor
• General condition and age of the home
• Location of the home, including views or other remarkable features
• Size and features (for example, the number of bedrooms and baths) of the home and property
• Major structural improvements such as additions and remodeled rooms
• Features and Glossary Term:amenities layer such as swimming pools and wood flooring

What’s the difference between an appraisal and an inspection?

An appraiser does not necessarily look for potential defects in the home. That’s a home inspector’s role.

An inspector would be hired by you directly if you are purchasing a home and want an itemized report of potential repairs or problems with the home. On the other hand, the appraiser is hired by your lender to determine the home’s fair market value. This will allow your lender to ensure that the home loan amount is in line with what the home is really worth.