What Is a VA Home Loan Appraisal?
VA loan appraisals evaluate the property you wish to purchase and determine its fair market value. This is done by appraising the current state and condition of the home against other comparable homes that have recently sold—or are currently for sale—in the area.
VA appraisals differ from regular appraisals in that the property is required to meet the VA’s Minimum Property Requirements (MPRs). These are simply guidelines that help ensure buyers purchase a safe home in good condition.
During the VA appraisal, the appraiser uses the MPRs to make sure homeowners don't buy a home with lead paint, hazardous materials in or around the home, or moisture present in the basement, for example. They also ensure that the home's roof and structure are in good condition.
Who Needs a VA Home Loan Appraisal?
VA home loan appraisals are mandatory for those seeking to apply for most types of VA loans or refinances. However, some loans, like the VA IRRRL, may not require an appraisal.
As for when the appraisal happens, you will have the option to have your VA lender send an order for an appraisal as soon as you have signed a contract on a home, or you may seek out your own neutral third-party appraiser.
Will a VA Appraisal Cause Delays with My Loan?
If you're a VA loan applicant, you might be worrying that ordering an appraisal for your new home could delay and slow down how soon you're able to get into your dream home.
However, we have great news!
Unless the home is in poor condition and requires extensive renovations or rebuilding, there should be no reason for you to expect any delays.
If repairs do end up being necessary, the appraiser may perform a follow-up appraisal, often called a compliance inspection, to ensure that the necessary changes have been made and the home now conforms to the VA's MPRs.
Why Are VA Appraisals Important?
VA appraisals determine the value of the property you wish to purchase with a VA loan and will provide the fair market value of the property. Knowing the fair market value helps ensure that you don't receive a loan that is higher than the actual worth of the property.
For example, if your dream home is 2,000 square feet and it costs $200,000, then the price per square foot is $100. If nearby comparable properties are selling for $90 – $93 per square foot, then buying your home for so much more could set you up for financial failure.
If this happens and your dream home is priced higher than comparable homes, you can still get a loan. But you may have to renegotiate a lower price or pay the difference between the VA-appraised value and selling price.
To find out how to get your VA loan appraisal, contact Low VA Rates today. We'll help you move one step closer to getting into your new home!