Live Chat - Click Here       Republic Bank - Home
What is an appraisal and who completes it?
What types of things will an underwriter look for when they review the appraisal?
Will I get a copy of the appraisal?
Are there any special requirements for condominiums?
I'm purchasing a home, do I need a home inspection AND an appraisal?
I've heard that some lenders require flood insurance on properties. Will you?
How long does it take for the property appraisal to be completed?
I am refinancing. Why do you need to know when I purchased my home?
I'm not exactly sure of the amount of my real estate taxes. What should I do?
Do you provide financing for properties on large tracts of land?
I am buying a secondary residence, but it's not really a vacation home. How do I complete the application?
I am purchasing a home, why do you need the name of the real estate broker?
Who can I contact if I have questions?
Top

To determine the value of the property you are purchasing or refinancing, an appraisal will be required. An appraisal report is a written description and estimate of the value of the property. National standards govern not only the format for the appraisal; they also specify the appraiser's qualifications and credentials. In addition, most states now have licensing requirements for appraisers evaluating properties located within their states.

The appraiser will inspect both the interior and exterior of the home. After the appraiser inspects the property, they will compare the qualities of your home with other homes that have sold recently in the same neighborhood. These homes are called "comparables" and play a significant role in the appraisal process. Using industry guidelines, the appraiser will try to weigh the major components of these properties (i.e., design, square footage, number of rooms, lot size, age, etc.) to the components of your home to come up with an estimated value of your home. The appraiser adjusts the price of each comparable sale (up or down) depending on how it compares (better or worse) with your property.

As an additional check on the value of the property, the appraiser also estimates the replacement cost for the property. Replacement cost is determined by valuing an empty lot and estimating the cost to build a house of similar size and construction. Finally, the appraiser reduces this cost by an age factor to compensate for depreciation and deterioration.

If your home is for investment purposes, or is a multi-unit home, the appraiser will also consider the rental income that will be generated by the property to help determine the value.

Using these three different methods, an appraiser will frequently come up with slightly different values for the property. The appraiser uses judgment and experience to reconcile these differences and then assigns a final appraised value. The comparable sales approach is the most important valuation method in the appraisal because a property is worth only what a buyer is willing to pay and a seller is willing to accept.

It is not uncommon for the appraised value of a property to be exactly the same as the amount stated on your sales contract. This is not a coincidence, nor does it question the competence of the appraiser. Your purchase contract is the most valid sales transaction there is. It represents what a buyer is willing to offer for the property and what the seller is willing to accept. Only when the comparable sales differ greatly from your sales contract will the appraised value be very different.

The appraiser will create a written report for us and you'll be given a copy prior to your loan closing.

Top

In addition to verifying that your home's value supports your loan request, we'll also verify that your home is as marketable as others in the area. We'll want to be confident that if you decide to sell your home, it will be as easy to market as other homes in the area.

We certainly don't expect that you'll default under the terms of your loan and that a forced sale will be necessary, but as the lender, we'll need to make sure that if a sale is necessary, it won't be difficult to find another buyer.

We'll review the features of your home and compare them to the features of other homes in the neighborhood. For example, if your home is on a 20-acre lot, or has a large accessory building, we'll want to make sure that there are other homes in the area on similar size lots or with similar outbuildings. It is hard to place a value on such unique features if we can't see what other buyers are willing to pay for them. In some areas, additional acreage or outbuildings could actually be a detriment to a future sale. Finding comparable properties can be more challenging in rural areas where it is more difficult to find homes that have similar features.

We'll also make sure that the value of your home is in the same range as other homes in the area. If the value of your home is substantially more than other homes in the neighborhood, it could affect the market acceptance of the home if you decide to sell.

We'll also review the market statistics about your neighborhood. We'll look at the time on the market for homes that have sold recently and verify that values are steady or increasing.

Top

Yes, you will receive a copy of the appraisal.

Top

Since the value and marketability of condominium properties is dependent on items that don't apply to single-family homes, there are some additional steps that must be taken to determine if condominiums meet our guidelines.

One of the most important factors is determining if the project that the condominium is located in is complete. In many cases, it will be necessary for the project, or at least the phase that your unit is located in, to be complete before we can provide financing. The main reason for this is, until the project is complete, we can't be certain that the remaining units will be of the same quality as the existing units. This could affect the marketability of your home.

In addition, we'll consider the ratio of non-owner occupied units to owner-occupied units. This could also affect future marketability since many people would prefer to live in a project that is occupied by owners rather than renters.

We'll also carefully review the appraisal to insure that it includes comparable sales of properties within the project, as well as some from outside the project. Our experience has found that using comparable sales from both the same project as well as other projects gives us a better idea of the condominium project's marketability.

Depending on the percentage of the property's value you'd like to finance, other items may also need to be reviewed.

Top

Both a home inspection and an appraisal are designed to protect you against potential issues with your new home. Although they have totally different purposes, it makes the most sense to rely on each to help confirm that you've found the perfect home.

The appraiser will make note of obvious construction problems such as termite damage, dry rot or leaking roofs or basements. Other obvious interior or exterior damage that could affect the salability of the property will also be reported.

However, appraisers are not construction experts and won't find or report items that are not obvious. They won't turn on every light switch, run every faucet or inspect the attic or mechanicals. That's where the home inspector comes in. They generally perform a detailed inspection and can educate you about possible concerns or defects with the home.

Accompany the inspector during the home inspection. This is your opportunity to gain knowledge of major systems, appliances and fixtures, learn maintenance schedules and tips, and to ask questions about the condition of the home.

Our loan application process requires an appraisal to be completed. A home inspection is completed at the request of the buyer.

Top

Federal Law requires all lenders to investigate whether or not each home they finance is in a special flood hazard area as defined by FEMA, the Federal Emergency Management Agency. The law can't stop floods. Floods happen anytime, anywhere. But the Flood Disaster Protection Act of 1973 and the National Flood Insurance Reform Act of 1994 help to ensure that you will be protected from financial losses caused by flooding.

We use a third party company who specializes in the reviewing of flood maps prepared by FEMA to determine if your home is located in a flood area. If it is, then flood insurance coverage will be required, since standard homeowner's insurance doesn't protect you against damages from flooding.

Top

Licensed appraisers who are familiar with home values in your area perform appraisals. We order the appraisal as soon as the loan processing deposit is paid. Generally, it takes 7- 10 days before the written report is sent to us. We follow up with the appraiser to insure that it is completed as soon as possible. If you are refinancing, and an interior inspection of the home is necessary, the appraiser should contact you to schedule a viewing appointment. If you don't hear from the appraiser within seven days of the order date, please inform your Loan Coordinator. If you are purchasing a new home, the appraiser will contact the real estate agent, if you are using one, or the seller to schedule an appointment to view the home.

Top

The year you purchased your home and the price you paid for it are provided to the appraiser to assist them in finding data about your home through local public records. In addition, if you purchased your home in the last year some of the loan programs we offer require us to compare the original purchase price to the current appraised value so that any large increases in value can be justified.

 

If you don't remember the exact year and purchase price of the property an estimate will work just fine.

Top

If you're not sure exactly how much the annual real estate taxes are for the property you are purchasing, an estimate will do. The appraiser and title company will provide us with the exact amount later. If you do need to estimate the amount, shoot for the high side just to be sure.

Top

In some cases we are able to offer financing for homes on large tracts. What's most important is to determine if the size of your property is common for the area. The appraiser must be able to provide detailed information about the recent sale of similar homes on similar lots that have occurred recently. If that's not possible, we may not be able to provide the financing that you are requesting.

 

It's also important that your property be residential in nature. If the property is a working farm or is used for any commercial purposes, we may have issues. Contact a Loan Coordinator if you have concerns about the acceptability of your property.

Top

If you are buying a secondary residence that's not a vacation home (such as a home that's closer to work for use during the week) you should complete the application indicating that you are buying a primary residence. Before you submit your application you'll have the opportunity to enter additional information. Please make a note of your situation there so that your Loan Coordinator has all the details as they review your application.

Top

Though there is some variance across the country, generally the broker contact information is given to the closing agent or attorney and may be needed for scheduling the appraiser's inspection of the home. We'll make sure that everything necessary has been taken care of so that your closing happens as efficiently as possible.

 

Top

If you have any questions or concerns, please contact your Loan Coordinator either by phone at 1-866-758-3970 or by email at internetlending@republicbank.com

Our Loan Coordinators have one responsibility - making sure that your new mortgage experience is amazingly easy! If your Loan Coordinator is not available when you need a question answered, any of our Loan Coordinators can provide any assistance you need.

Treasury Management

Member FDIC Equal Housing Lender BBB Accredited Business McAfee Cloud Secure sites help keep you safe from identity theft, credit card fraud, spyware, spam, viruses and online scams
Contact Republic Bank & Trust Company toll-free 1-866-758-3970 | Email us
Loan Servicing Questions - Contact one of the following:
Loan Payments Department 502-394-4464
Loan Escrow Department 502-394-4462
Loan Payoff Department 502-394-4469

Nationwide Mortgage Licensing System (NMLS) Republic Bank & Trust Company ID # 402606
www.nmlsconsumeraccess.com