For the first-time home buyer, what they care about most is finding a home they love and can afford. The first step in this process is searching. This can be happened by using many Internet sites providing homes for sales and then ultimately selecting a realtor to help them view prospective properties. Typically the second step in the process is confirming what they can afford. Affordability typically is comprised of a few factors: down payment, current income, interest rare. Down payments is the amount of money saved up to help pay for the potential purchase. Current income is the amount of money that you make now that can provide support for why a lender would provide you a loan, and you are able to repay the borrowed funds. Interest rate is next. The interest rate is as important as the other two factors because lower interest rates mean the cost of borrowing money is cheaper or you can possibly afford to borrow more money than if rates were higher.
The home mortgage process can take approximately 30 to 60 days to verify and secure financing, and as part of the process, a house appraisal is extremely important. Because a house appraisal estimates house’s value, which is known as appraised value, it is a method for the lender to confirm that your desire to purchase a house is based in fact and not solely on emotions. In addition to verifying a borrower’s ability to quality for a loan, insuring that the home is worth an amount equal to or more than the home’s purchase price is critical.
The appraisal helps first-time buyers confirm that they are not overpaying for a home just because their emotions are running high on adrenaline. Additionally, the appraisal determines the lender’s maximum loan amount based on the borrower’s credit and income qualifications.
Granted, there are many steps in buying a home and it is important that the buyers have a good team including: realtor, home inspector, lender and attorney. For first-time buyers, before buying their home and closing on their home mortgage, they will also need to review their loan commitment with their home mortgage consultant, and review the insurance to ensure they have the rights to purchase the property. If refinancing, first-time buyers also need to leave three business days to cancel the transaction if the loan is for their primary residence or second home.
A real estate appraisal is also helpful to make sure that first-time buyers won’t run into major problems in the future. For a home inspection, they will mainly focus on heating system, central air system, plumbing, electrical system, insulation, walls, windows, doors, basement, foundation and roof. If the inspection finds that there is something wrong with the overall condition of the home, then first-home buyers can go back to the home sellers and negotiate a new price to include any money required to fix problems that were found during the home inspection. In other words, for first-time buyers, it is nearly the same for them to buy the property and buy a per-owner vehicle. In some cases, when first-time buyers are going to buy a property from previous home owners, they need to have an inspection to check if there are serious problems exist or if there will have some potential problems for future use.
The appraiser will focus on the characteristics of the home such as the number of bedrooms and bathrooms, quality of finished and of course location of the property as all of these contribute to determining the appraised home value OF first-time buyer’s prospective home. What is more, it is also important that the main difference between a home inspection and an appraisal is that the appraisers are solely focused on the value of the home, so they look at different supply systems such as electric, heating, gas and the numbers of bedrooms/bathrooms. All of these can affect the price of the home, so it is useful to get a real estate appraisal before purchasing a new or used property for first-time buyers.
Ultimately, the real estate appraisal for first time home buyers is to protect them I their decision to make one of the largest investments in their life up to that point. Additionally, the real estate appraisal helps protect the bank who is the buyer’s financial partner for the life of the mortgage. Therefore, the appraisal serves multiple parties to protect their interests.
Nate Segall: First-Time Home Buyer Q &A: Why Do I Need a Home Inspection or Appraisal Inspection?
Buy Your First Home at Wells Fargo