Lenders need a professional, independent appraisal of the property you want to buy or refinance to ensure that it is worth at least as much as they are being asked to lend on it.

If you are making a smaller down payment and have a lower credit score, the lender is going to be even more interested in making sure the property that will be collateral for the loan is worth lending the amount requested.A professional, independent appraiser will usually visit your home and inspect its interior and exterior. The appraiser doesn't want to buy your home, and isn't a visiting head of state. So whatever you do, do not postpone the appraisal until you get a chance to "clean up a little." Cleaning does not make your appraised value higher! And, delaying can have a negative impact on the value in today's market.

The appraiser will form an opinion on the probable market value of the property considering sales of similar homes in the area.  Other factors will be considered - foreclosures or distress sales; improvements, desirability... He or she will prepare an appraisal report explaining the conclusion. The appraisal belongs to the lender considering lending money with the home as collateral. You can request to receive a copy of the appraisal either as a courtesy or in keeping with state law. Let us know you're interested and we'll help.

The lender wants to know first of all whether the property is worth at least as much as the loan amount. (In cases of 100% financing.) In the unlikely event the lender would have to foreclose, it wants to know it should be able to recoup at least the loan amount.

A wise investment of time would be for you to check your house for "curb" appeal, prior to the arrival of the appraiser.  Remember, the lender will see pictures of your house and compares them to those of "like" properties.  If your house looks like a "dump" chipping paint, un-mowed weeds, trash... Your house will be either compared to properties "looking" like yours or downgraded in value.

An appraisal can cost from $375 to $500 or more for very complex properties, or if it is for a rental or income property additional schedules will be required - increasing the price. You as the borrower pay the lender (or in some cases the appraiser - at the door). Many lenders will ask you to pay a deposit to them for the appraisal fee before it is ordered.