Why Do I Need An Appraisal?

Do we really need an appraisal? Why do I need an appraisal if I had an appraisal years ago? These are questions we constantly are asked in our office when our clients are refinancing. We will try to answer these questions as we believe at Robert Floris’ Mortgage Architects that as consumers ourselves, we would like to know these answers if the roles were reversed. When requiring an appraisal, banks are essentially measuring their risk and protecting their money. In most cases they are lending a greater percentage of money than the amount of equity in the home.

Here Are The Top 4 Answers To “Why Do I Need An Appraisal”

1. To Determine The Value Of The Property

This one is probably the most obvious reason. As noted earlier, the financial institution wants to mitigate their risk when lending money and ensure the bank’s safety.

2. Condition Of The Home

The vast majority of homes are quite normal. However, some have amazing improvements to reflect the superior value. On the flipside, we have been turned down on mortgage approvals when the home reflected hoarders, no kitchen, holes in the walls, water damage and foundation problems. Again the bank wants to protect the investment.

3. Location Of The Home

Another point that many clients don’t consider when asking themselves the question “why do I need an appraisal”, is the location of the home. For example, in Hamilton, this is something we are faced with all the time. Lenders do not appreciate our housing stock north of Barton Street. Why? It is considered unmarketable due to industry nearby. This has been a frustration of mine for the past 25 years. Other reasons is that it can be situated in a flood zone area, or we have also seen homes which did not have proper access due to the remoteness of the dwelling.

4. Zoning

The City of Hamilton has major streets such as Main Street, where the whole street is zoned commercial. There are many homes on this busy road. However, most financial institutions will avoid lending in that area. At Robert Floris’ office we have also been turned down due to agricultural and industrial zoning.

One final thought: another question that comes up from our clients constantly is if they can have a copy of the appraisal. Unfortunately not! It belongs to the bank since they are lending you the money.

Robert Floris is a Mortgage Broker. His office is located at 651 Fennell Avenue East in Hamilton, Ontario. If you would like to speak with Robert, he can be reached at 905-574-9200 #215. Alternatively, you can contact Robert here.

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