Purchase agreements, chattels, variable mortgages – when it comes to buying a new home, there are quite a few real estate terms that you should be aware of. Two terms that you may have already come across are home inspection and home appraisal. Although somewhat similar, these are not actually the same thing. Here is the difference between a home appraisal and a home inspection and what you should know about each.
All About Appraisals
An appraisal is a financial assessment of how much a home is actually worth. Appraisals are required by mortgage lenders to determine what the market value of a property is prior to the mortgage application loan being approved. If it’s found that the market value is considerably less than the amount of the mortgage, it’s possible that your mortgage financing will not be approved. Further, although some lenders may cover the appraisal fee, it’s often the responsibility of the home buyer to pay for this cost.
What You Should Know About Appraisals
Your mortgage lender will ensure that there is a qualified person to appraise the value of your potential new home. It’s important to remember that the appraised value that is decided upon represents the true or market value of your home. When appraising a property, an appraiser will take into account location, the condition of the property as well as the recent sales prices of comparable properties in the area.
Inspecting Home Inspections
Home inspections, in comparison, are less about the financials and more about the general condition of the property that you are interested in. The outcome of a home inspection is a thorough report that is generated and provided to the potential home buyer with details about the home inspector’s findings. Home inspections can uncover problems with the house that could end up being deal-breakers, such as mould, asbestos, faulty wiring, leaks, etc. Even if they don’t uncover anything drastic, they can still be helpful for home-owners to recognize what details they should be on the lookout for around the home in terms of maintenance and repairs.
Getting a home inspection is a good idea as it lets potential homebuyers know exactly what they are purchasing. Additionally, if a home inspection was included in the conditions of the purchase agreement, a buyer could choose to call off the deal if the results of the home inspection are not satisfactory.
What You Should Know About Home Inspections
It’s up a potential buyer to hire a home inspector. Keep in mind, however, that home inspectors are not regulated. As such, it’s important to do your research when looking for a suitable candidate. Before you agree to work with a home inspector, ask about their experience and training. It’s also a good idea to do a quick Google search to see if you can find any customer reviews online.
Buying a home can be complex and confusing. Working with a real estate agent you can trust can help you navigate the process. Just as a real estate agent can help with the process of searching for and buying a new home, a mortgage broker can help take the stress out of finding the perfect mortgage solution. As a mortgage broker in Barrie, I’ve worked with many diverse clients to help match them with the mortgage they need. Contact me today at (705) 315-0516 to learn how I can help you.