Home Buying Coarse
➜ Don’t skip the video above. That’s the lesson. The text below is a quick recap you can reference later.
Lesson 8
Appraisal & Insurance
This step confirms value and locks in the protection required to close.
Overview
The appraisal ensures the home is worth what you’re paying. Lenders will not approve a loan for more than the appraised value.
At the same time, you’ll finalize your homeowner’s insurance, which is required before closing.
Behind the Scenes
- The lender orders the appraisal through a third-party appraisal management company.
- The appraiser evaluates comparable sales and the property’s condition.
- If repairs are required for loan approval (common with FHA or VA loans), they must be completed before closing.
Key Points
- If the appraisal comes in low, we’ll strategize — renegotiate, challenge the report, or cover the difference if comfortable.
- Shop multiple insurance providers; coverage and premiums can vary significantly.
- Proof of insurance must be delivered to the lender prior to closing.
Tip
Insurance and property taxes are usually collected monthly in your escrow account. This is why your mortgage payment can fluctuate yearly — it’s normal.
Important Note: Appraisal outcomes, insurance requirements, and escrow practices vary by loan type, lender, and state. This lesson provides general guidance only. Always rely on lender instructions and your contract for final requirements.
It’s Simple. It’s Nicole.
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