Buying a home is one of life’s biggest accomplishments. The process is rife with excitement, expectation, and—due to its magnitude—a certain level of anxiety. Everyone simply wants their first (or second, or third…) home purchase to go right, and a part of ensuring this happens is understanding the appraisal process. To ensure your closing concludes on schedule, you need to be sure that all the dotted lines are signed within the window that your appraisal remains valid. This period varies based on circumstance. Keep reading to gain better understanding of the how and why.
How Long is Your Home Appraisal Good For?
The answer to this question depends on the reason you have ordered an appraisal in the first place.
Home appraisals serve a range of purposes, including mortgage loans, home equity loans, employee relocation, estate evaluation, litigation for divorce, and so on. Here we are talking only about appraisals ordered to buy a home, and so will address validity only as it concerns mortgage loans.
The type of loan you have will determine how long your appraisal is good for. Federal Housing Administration (FHA) loans, for instance, normally recognize the validity of an appraisal for four months. This can be extended by 120 days if an application is made prior to the expiration date. Veterans Affairs (VA) loans, on the other hand, validate an appraisal for up to six months. Finally, Federal National Mortgage Association (FNMA) loans generally recognize an appraisal of a new home for 12 months, and that of an existing home for 120 days.
Why Do Home Appraisals Expire in the First Place?
Appraisals expire for the same reason appraisals exist: because home prices fluctuate.
A house’s price is determined by the selling price of similar houses in the area. When an appraiser comes to visit, they consider your home’s condition, amenities, and characteristics, and calculate the worth of all this as a function of the current state of the real estate market.
Like all markets, the real estate market is influenced by a range of complex factors including shifting population demographics, interest rates, the general state of the economy, and government policy, among others. As the events of the last two years have shown, all of this can change very quickly, and thus so too can the value of a home.
How Do you Keep Your Closing on Schedule and Avoid an Expired Appraisal?
Your mortgage lender is a great resource for ensuring things move according to schedule. One key piece of advice you will receive is to confirm the time and date of settlement as soon as you receive your final loan approval. When this is done, a number of other small considerations can help keep things on track.
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- Schedule your closing at a time when you have at least two or three free hours. Avoid lunchtime closings, as these often do not provide sufficient time to get all the paperwork done, which can then provoke delays.
- If you plan to move in the day you close, agree to do all the paperwork as early as possible so time remains for everything else.
- The day before you close, conduct a final walk-through to avoid any unpleasant surprises and to ensure all agreed-upon repairs have been completed.
- Lastly, ensure your closing is set for at least a few days prior to the expiration of your appraisal such that you have a cushion should any unforeseen hiccups arise.
To learn more about home appraisals and all that goes into making sure your home purchase goes off without a hitch, do not hesitate to contact Appraisals Unlimited by calling 781-449-7600 or emailing us at office@appraisals-unlimited.com.
If you have an immediate need for a commercial or residential real estate appraisal, fill out the brief form below or order an appraisal online. We are the most trusted appraisal company in New England and New Jersey, performing more than 9,000 appraisals every year!
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