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Home Appraisals: How To Refinance Successfully


What You Need To Know

  • Appraisals are a necessary part of refinancing – they determine the value of your home and provide lenders with the details they’ll need to lend you the right amount of money
  • An appraisal might hurt a refinance if your home's value is lower than what you owe on your mortgage
  • Refinances usually close within 14 days of an appraisal. It takes 30 – 45 days for a refinance to close without an appraisal


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You may be thinking about refinancing your home for any number of reasons. Maybe you’re hoping to get your hands on some cash (hello, equity!), shorten the length of your mortgage or you want a lower monthly mortgage payment. 

Whatever the reason, chances are that you’ll be looking at a refinance appraisal – a refinancing agreement that’s based on the current market value of your home. 

We’ll answer all the burning questions you have about the refinance appraisal process and give you the insight you need to take control of your mortgage.

What Is an Appraisal Refinance?

When you’re ready to refinance your home, your mortgage lender will typically require a professional appraisal. During this part of the refinance process, you’ll have a licensed or certified home appraiser visit your home to provide an estimate of its value. 

Appraisals are completed by professional appraisers. They are paid based on their time and have zero say in your home loan approval. The appraiser’s got one job: to determine how much your house is worth so your lender can figure out how much to lend. 

While the appraisal might cost you a few hundred or even thousands of dollars, it’s worth knowing whether your property has sufficient value. 

Most appraisals are done in person. Some appraisers and lenders offer other options, including drive-by, online and hybrid appraisals.

Do You Need an Appraisal To Refinance?

Most banks, credit unions and online lenders require an appraisal because it helps them determine how much money you can afford to borrow.  But there are some options for no-appraisal home loans.

Borrowers with conventional mortgages may be able to refinance without an appraisal, but appraisal waivers are usually reserved for homeowners in specific circumstances.[1]

If you have a government-backed loan, you may qualify for a streamline refinance. Streamline refinance loans don’t require home appraisals and are reserved for homeowners whose original loan was a government-backed loan taken out through the:

  • Federal Housing Administration (FHA)[2]
  • Department of Veterans Affairs (VA)[3]
  • U.S. Department of Agriculture (USDA)[4]

You’ll need to meet specific criteria to get an appraisal waiver for an FHA loan, VA loan or USDA loan. 

Streamline refinance loans and no-appraisal loans usually max out at around $400,000. If your house is worth more than that, you should expect to pay for a home appraisal.[5]

What Are the Pros and Cons of an Appraisal?

If you’re nervous about getting a refinance appraisal, weigh the pros and cons to gain a better understanding of how it all works. 

Pros of a refinance appraisal

  • Get rid of private mortgage insurance (PMI): If your home is valued higher than it was when the house was appraised during the home buying stage, you might be able to avoid PMI on your refinance loan. 
  • Take advantage of your improved credit: If your credit score is higher or your debt-to-income (DTI) ratio is lower than when you originally got your mortgage, you might qualify for a lower interest rate. 
  • Take advantage of extra equity: If the appraisal value adds to your home’s equity, you might be able to put some extra cash in your pocket. 

Cons of a refinance appraisal

  • Loan delays: Once scheduled, an appraisal usually takes about a week to complete. This gives you time to get your appraisal report and complete your loan application. Issues, like a lack of available appraisers, might delay the appraisal process, which would delay loan approval. 
  • Mind the appraisal gap: If you get a low appraisal (think: the appraiser determines your home’s value is lower than you expected), it may lower the amount of home equity you have and make the lender think twice before approving your refinance loan.

What Can I Expect During an Appraisal?

Paying for the appraisal is normally your responsibility, and you have to work with the appraiser chosen by your lender. While some lenders may ask you to pay the appraisal fee upfront, others will fold the appraisal fee into the loan’s closing costs. 

With a standard, in-person appraisal, the appraiser performs an interior and exterior inspection of the home.  

An appraiser will want to see that your house is well cared for. So, before the big day, roll up your sleeves and fix that porch swing or slap a fresh coat of paint on your living room walls. 

Here are some more ways to get your home in shape just in time for an appraisal:

Tackle some DIY home improvement

Do a few simple home improvements – paint touch-ups, plumbing repairs or tightening door hinges. If you’ve got the time and the money to tackle bigger projects, renovations like landscaping and kitchen and bathroom remodeling typically add the most value to properties. 

Clean up 

Give your house a deep clean on the inside – but don’t forget the outside. Trim overgrown grass, pull out any weeds or rake up the leaves in your backyard. And as you’re working your way through the inside of the house, go ahead and flip on the light switches and check that all your appliances are working.

Talk up your house

When the appraiser visits, it wouldn’t hurt to humblebrag about any improvements you’ve made to your house so they can incorporate that info into their report. From replaced kitchen cabinets to new flooring or countertops, home improvements can boost a home’s value. And it’s also worth mentioning those unseen upgrades, like insulation and energy-efficient upgrades.

What Happens After an Appraisal?

Once the appraisal is completed, the appraiser will draft a report and send it to your lender. The appraisal report should include: 

  • A map of your property and the surrounding area 
  • The recent home sale prices of similar homes in the area
  • A sketch of the outside of your house
  • A written explanation of how they calculated your square footage
  • Pictures of the front, back and street view of your house
  • Public records used to calculate the home’s value
  • Your home’s appraised value

The appraisal report should give you and your lender insight into how the appraiser arrived at their determination, and it may give you insight into other ways to increase your home’s value.

If the appraisal report meets your lender’s expectations, they’ll begin the process of determining how much you’re qualified to borrow and start underwriting your loan.

If you get a lower-than-expected appraisal value for your home, inspect the appraisal report to make sure there are no errors. If you are able to show that there was a mistake in the appraisal, you can work with your lender to request for the appraisal to be adjusted.  

Or, if your loan doesn’t go through, your appraisal will be valid for 2 – 6 months. You can always use the appraisal to try to refinance again, even if you end up working with a different lender.

Do I Have To Do an In-Person Appraisal?

Since the start of the COVID-19 pandemic, people often hesitate at the thought of a stranger walking through their home. Most lenders and appraisers have solutions in place to accommodate borrowers’ concerns. There are also appraisal options that can speed up the process when an appraiser can’t visit a home within a reasonable time frame. 

If you don’t like the idea of an in-person appraisal or you’re in a hurry to move the process along, ask your lender what appraisal alternatives they offer. The alternatives might include: 

Hybrid appraisal

A hybrid appraisal (aka a bifurcated appraisal) is meant to expedite the process. It involves a third party, like a real estate agent, who conducts interior and exterior assessments of your home and reports back to the home’s original appraiser. The appraiser gathers multiple listing service (MLS) data and public records to complete the appraisal.

Drive-by appraisal

In this scenario, an appraiser examines the exterior of your home and uses public records, such as expired real estate listings, property tax records and pictures of the house to determine its value. The appraiser may also look at comparable homes that have recently sold in the area.

Online appraisal

Some real estate agents, appraisers and real estate websites offer online home appraisals. While these estimates can be accurate to a certain extent, your lender may not accept determinations made through an online appraisal.

Getting an Appraisal Refinance as Valuable as You Are   

Getting your home appraised is a necessary and often valuable part of the refinance process. What may look like an added expense at first glance is designed to better inform you and the lender about the “true” value of your home.

  1. Freddie Mac. “Guide Section 5601.9.” Retrieved January 2022 from

  2. U.S. Department of Housing and Urban Development. “Streamline Refinance Your Mortgage.” Retrieved January 2022 from

  3. U.S. Department of Veterans Affairs. “VA Funding Fee And Loan Closing Costs.” Retrieved January 2022 from

  4. U.S. Department of Agriculture. “Streamlined Assist Refinance Loans.” Retrieved January 2022 from

  5. National Credit Union Administration. “Residential Appraisals Threshold Increase and Other COVID-19 Related Relief Measures.” Retrieved January 2022 from


In Case You Missed It

  1. There are different ways to have your house appraised during the refinance application process, including drive-by, online, in-person and hybrid appraisals

  2. If an appraiser gives your home a lower value than you expected, you can dispute it as long as you have a valid reason for challenging the decision

  3. Showing your house some TLC before the appraiser pays a visit is a good way to ensure that it looks great and (fingers crossed!) gets the best possible valuation

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