FHA
Loans - Property Appraisal Qualifying
Once you have found the
home you wish to purchase or you have decided to refinance, FHA will
want to know that the house is worth the price you pay or the value
indicated.
The FHA loan amount that the lender approves
for you will be based on the appraised value of the property
or the sales price, the lower of the two. Under FHA loan guidelines,
you may obtain a FHA mortgage loan up to 98.15% of the property
appraisal value.
The value of the property is a lender's best
assurance that they can recover the money they lend, even if you
stop making house payments. If you stop making payments, the lender
has the right to sell your home to pay off the loan - this process
is called foreclosure.
The lender wants to insure
that the property could be sold at a price that's worth the loan
amount. Also, should you decide to sell your home before you have
finished paying off your mortgage loan, you'll also want to sell
the house for a price that allows you to pay off the remaining loan
balance and perhaps make a profit as well.
That's why FHA allows only FHA approved licensed
appraisers to appraise of the value of your home.
We will require a professional appraisal of the home you choose
to buy before the loan amount for your mortgage is finalized.
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