What Is a Mortgage Appraisal Fee?
The mortgage appraisal fee pays an appraiser to visit a home for the purpose of determining the value of that home. The fee varies based on the type of mortgage requested on the property.
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Significance
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An appraiser is used by lending companies to protect their interests when loaning money to a borrower for a mortgage on a property. Based on the value determined, the lender will determine the maximum mortgage amount they will lend on that home.
Considerations
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The mortgage appraisal fee is charged to the borrower. This fee is often collected by a lender prior to the appraisal being done since appraisers get paid whether the mortgage goes forward or not. The borrower is entitled to a copy of the finished appraisal as part of the fee.
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Process
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Once a borrower has paid the mortgage appraisal fee, the lender orders an appraisal. An appraiser is paid the fee to view the property inside and out, assess the condition of the property and the neighborhood the property is set in.
Results
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After the appraiser has gathered the property information, she compiled the collected information in an appraisal report to the lender determining home value. The appraiser also includes comparisons to other similar area homes in the report to support their value determination.
Costs
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In May of 2009, new mortgage industry guidelines brought about more regulations for lenders that required more detailed work on the part of appraisers. This additional work has translated to a rise in appraisal fees to an average cost of $450 to $550. Special mortgage products such as FHA and VA require more paperwork for an appraiser and they will typically charge $50 to $100 more than average for these types of appraisals.
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