Creative Commons image courtesy of Flickr user Mark Hoz
Appraisals are an essential process in your VA home purchase, but there are some misconceptions about the process.
First and foremost, appraisals for a VA home loan application are required by the Department of Veterans Affairs. The appraiser will use the VA’s “Minimum Property Requirement” guidelines to determine if the home qualifies for a VA loan.
If the house you are trying to buy is not in good condition, the VA inspection will not go well. The VA wants you to purchase a home that is ready for you and your family to move into, not a fixer upper.
There is only one difference in your VA contract from other offers sellers will receive - the seller must pay for the pest inspection. This requirement was put into place to protect YOU, the buyer.
If a home has trouble with pests, and the borrower is required to pay for every individual inspection out of pocket, you then run the risk of not affording a potential down payment. The seller will always pay for the pest inspection on a VA home loan appraisal, period.
The appraiser, for example, will check that the structure of the home has not been damaged by termites, and that Mother Nature generally does a good job of staying out of the property at all times.
Understand the VA's Role
The biggest reason so many appraisal rules exist for VA home loan applicants is quite simple, but often misunderstood: the VA is acting as the insurance policy on your loan.
When BBMC or your Banker tells you the loan is "Federally-Backed," this is what we mean. The VA does not issue the loans, but simply insures each VA home loan purchase to verify that you are receiving the best possible property for you and your family.
As we mentioned above, the VA does not want our nation's veterans to live in unsatisfactory living conditions. Your appraisal is part of the process to help you, and the VA, feel better about the property before you buy and they insure.
An Appraisal Does Not Mean Full Inspection
It is likely that your VA appraisal will only satisfy the MPR guidelines, and not much more than that. All parties involved with your potential VA home loan transaction will most likely be notified of any glaring issues outside of the MPR.
You're probably thinking, "What if I have to go through multiple appraisals to find the home with the least amount of potential issues? Won't that cost me a lot of money?"
It's true that your VA appraisal costs you money per instance. But BBMC Mortgage will work with you and possibly roll the cost of those appraisals into the loan, so you pay no money on appraisals at signing. Ultimately, that decision is up to you.
At the end of the day, an appraisal on your VA home loan purchase is intended to offer a closer look into your potential investment. BBMC will work with you and the outside resources to help your application process effectively move forward.
If you have any other lingering questions about the VA appraisal process, please do not hesitate to reach out to a VA Home Loan Specialist at BBMC Mortgage. We are standing by to answer any questions you have about the VA home loan process!