What Do Home Appraisers Look For When Refinancing?

Written by Banks Editorial Team
3 min. read
Written by Banks Editorial Team
3 min. read

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Are you planning to refinance your home soon? The process is similar to what you experienced when you took out your current mortgage. Most lenders will require an appraisal before you close on the new loan. While market conditions play a significant role in how much your home is worth, there are actions you can take to possibly get a more favorable appraisal. 

Read on to discover what appraisers look for, how to maximize your home value for a higher valuation and what could happen if the appraisal comes in low. 

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What Do Home Appraisers Look For When Refinancing Your House?

See here the most common things home appraisers may look into when refinancing your home loan:

  1. Exterior: Does your home have curb appeal? Is the exterior well kept or in dire need of improvements or repairs? 
  2. Interior: Is the interior of your home decluttered, organized and in stellar condition, or does it need work? Are the systems and appliances fully-functional? How are the flooring and walls? 
  3. Location: Is your home close to schools, stores, gyms, the interstate or other businesses? Are there noisy streets or train tracks nearby?  
  4. Size: How many square feet is your home? What’s the floor plan? How many bedrooms and bathrooms are inside? 
  5. Home Improvements and Amenities: Have you made any additional improvements to the home? Are there amenities in your home, like a swimming pool or outdoor kitchen, that make it a more desirable place to live? 
  6. Any Negative Features: Anything and everything that can have a negative effect on the value of your home.

Can You Fail a Home Refinance Appraisal?

It’s impossible to fail a home refinance appraisal. However, it could come in low, which can be problematic for a few reasons. If you are seeking a cash-out refinance, you’ll likely have to pull out less than you intended to. 

There are also instances where you may be denied refinancing altogether. This typically happens when the appraised value of your home is less than what you owe on the mortgage, which means the property is underwater. In this case, you’ll have to hold off until property values increase in your area, you make improvements to your home or both. 

Home Renovation Loans

Learn how the RenoFi ReFi cash-out refinance home renovation loan allows you access up to 80% of your home’s projected value after renovation.

Ways to Maximize Your Home Value For a Higher Valuation

If you are looking into home additions or repairs that could increase your home value, these are some things you could do:

Fix Major Problems

Are there broken appliances, fixtures or systems in your home? If possible, have them repaired before the appraisal to improve your chances of receiving a higher valuation. 

Repaint

One of the main ways you can improve the appearance of your home’s exterior and interior is to apply a fresh coat of paint. You can always do it yourself or have a professional repaint the property for you. Either way, it’s a small investment that can really pay off. 

Document Home Improvements

Make a list of all the upgrades you make to the home and leave it on the counter for the appraiser to review when they arrive. This is especially important if you’ve completed projects that aren’t easily noticeable but warrant the appraiser’s attention.

Cleaning Up

Consider tidying up your home before the appraisal. You can hire a cleaning service or do it on your own, and don’t forget to remove items you no longer need to clear the clutter. If time permits, organize items throughout the home to make it more appealing. Also, have the carpets and hardwood floors professionally cleaned or polished. 

Removing Unattractive Features

This can include dated landscaping or features in the interior of your home that are no longer appealing. 

How to Finance Home Improvements to Increase Your Home Value

If you’re planning to do a cash-out refinance to cover the cost of home improvements? Instead of pulling the equity out of your home and replacing your current loan with a new one, consider a RenoFi Loan.

You can borrow up to 90 percent of your home’s post-renovation value, which means a large equity in your home is not needed to access the funds you need. Here’s how it works: 

  • Step 1: Get pre-qualified for a RenoFi Loan using the online tool on their website. If there’s a potential match, you’ll be assigned to a dedicated RenoFi Advisor to assist with the process. 
  • Step 2: Explore matches from credit unions in the RenoFi network.
  • Step 3: Gather the documents you’ll need to formally apply for a loan and work with a dedicated RenoFi advisor to select the loan option that best fits your needs. 

That’s all there is to it. Visit RenoFi.com and use their online tool to inquire about a renovation loan, view today’s rates or start the application process. You can also use the loan calculator to determine how much of a loan you’re eligible for. And if you don’t qualify for a RenoFi ReFi loan, they also have a home equity loan and HELOC loan products to complete home improvements available.

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All data provided by the Home Mortgage Disclosure Act, at cfpb.gov updated Dec, 19
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