Everything you Must Know About Appraisals for a Reverse Mortgage

If you’re thinking about taking out a reverse mortgage in Los Angeles, you’ll need an appraisal. Don’t worry, it’s a normal part of the process, but just the word appraisal freaks people out, making them think they won’t get approved for a reverse mortgage.

 

Here I break down everything you must know about the reverse mortgage appraisal so you embrace it rather than fear it.

What is an Appraisal?

An appraisal is an independent review of your home’s fair market value. It can be done only by a licensed appraiser. The appraiser will visit your home, take measurements, and jot down notes about the home’s features and conditions.

 

It’s not a judgment of your home’s size or even condition, but just an inspection to compare it to the most recently sold homes in the area.

 

After the appraiser inspects your home, he/she will find homes like yours that sold within the last six months. Typically, they look for homes within close proximity to your home for the best comparison.

 

The appraiser looks at the sales price of the recently sold homes and adjusts them (up or down) based on the features or conditions your home does or doesn’t have compared to the others.

 

The appraiser comes up with your home’s fair market value which the lender uses to determine how much money you can receive in your reverse mortgage.

How an Appraisal Affects your Reverse Mortgage

You can imagine how different the home values are in Los Angeles and surrounding areas. What matters though is the value of your home. The lender will use this amount to determine how much cash you can receive from it.

 

Lenders take the home’s value and multiply it by the percentage they can give you based on the age of the youngest borrower on the loan. The younger you are the lower the percentage of money you can take out of your home’s equity and vice versa.

How Long Does an Appraisal Last?

The appraisal is good for 120 days from the date the appraiser conducted it. If you don’t close your reverse mortgage in Los Angeles within that time, you’ll have to pay for another appraisal since the real estate industry can change within even a few months.

What if you Don’t Agree with the Appraised Value?

If you don’t agree with the value the appraiser came up with for your home, you can challenge it. This typically works if you have proof of one to three other comparable sales in the area that sold for more than the appraiser valued your home for, but there’s no guarantee the lender or appraiser will approve the challenge.

Final Thoughts

Your appraisal determines how much money you can tap into in your home. It’s best if you ensure your home is in good condition, all repairs are completed, and you’ve done basic maintenance on it before the appraisal.

 

If you’re wondering how the reverse mortgage works and if it will benefit you, I encourage you to download my free book by visiting www.reversemortgagelive.com. This is a limited-time offer, so act fast and learn everything there is to know about the reverse mortgage.

Have Questions? Just Need More Information? Contact Us Today So We Can Help

 

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