FHA Appraisal Questions and Answers
Borrowers, especially first-time home buyers, might not know what the appraisal process entails or how it works; knowing before you apply can be a big help in terms of knowing what to expect.
#5: Who Performs the FHA Appraisal?
FHA appraisals must be carried out by a local FHA-approved fee appraiser who has met FHA minimum requirements. The lender is required to pull the name of an approved FHA appraiser from an official roster. This roster is the only permitted source of appraisers for any given housing market.
#4: How Much Do FHA Appraisals Cost?
There is no fixed cost for an appraisal; the actual amount will vary depending on the housing market and other variables. Expect to pay somewhere in the ballpark of $400 to $500 for an appraisal (as a rough estimate only). Properties in more remote and harder to access areas may cost more.
The cost of the appraisal is a typical expense of the home loan process. It is not optional, but is necessary for the lender to determine the proper loan amount.
#3: Can I Rely on the Appraisal to Tell Me if the Home Is Suitable for Purchase As-Is?
No. The FHA appraisal process is not designed as anything but a tool for the lender to determine if the home meets minimum standards.
The FHA appraisal is NOT a home inspection and does not function like one. Home inspections are necessary as a separate expense to tell the borrower whether the home has problems or not.
Do not rely on the FHA appraisal as a way to determine the home’s condition. The FHA itself warns about doing this in a publication titled, For Your Protection, Get A Home Inspection.
This FHA publication advises that the FHA cannot provide help for a borrower who does not pay for a home inspection, buys the property anyway, and later discovers problems with the home.
#2: Can I Get an FHA Appraisal Do-Over if I Don’t Agree With the Results?
No. FHA loan rules state that a second appraisal ordered for revaluation purposes only is not allowed. If there are material defects with an FHA appraisal, that is one thing; FHA policy toward second appraisals does not permit them to be ordered simply to re-value the home in a more favorable way to the borrower.
#1: When My Appraisal Is Done, Can I Use it Later to Refinance?
To boil it down to the simplest answer possible, once you have used an FHA appraisal to complete a home loan transaction, a new FHA loan would require a new appraisal.
The appraisal is basically good for the transaction it is ordered for; once that transaction has successfully completed the FHA appraisal process would be required anew for a refinance loan unless the refinance (such as an FHA Streamline Refi) does not require a new appraisal.
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