Whether you are searching for refinancing options or looking forward to releasing equity to buy an investment property, the property valuation is an important part of any finance application process. At times, the outcome of your property valuation can hinder the process of application progress. So, homeowners need to know the different types of valuations that your lender may request. Below are some effective ways to prepare your property for a good valuation.
Why Lenders do Property Valuation?
Since the lender takes security over your property to provide you funds or loans, they need to check the property’s overall value in the market. It helps them to evaluate and determine the sufficient amount of money for lending. Lenders evaluate the property and allow the borrowers to take up to 80% of the property value without incurring the mortgage insurance. To verify the property’s valuation, the lenders ask to conduct a property valuation because it is a crucial part of the loan application process.
The Types of Property Valuation Conducted
There are two major types of property valuations – Full Valuations and Automated Valuation Model.
- Automated Valuation Model or AVM – AVM is the process that relies on the purpose-built valuation system, and it develops the assessment of the property’s value. The comparable sales figure, property data, and information specific to the property are valued.
- Full Valuation – The process involves a physical inspection of the property and analyzing the comparable sales, market data, and more. The experts will take images of the property and measurement of all rooms and make notes on the property’s condition and quality.
The valuation system of each lender varies, and they have their experts for property valuation. The lender’s valuation system indicates what type of valuation is needed, and they will also assign an expert from their panel for the valuation process.
So, discuss the flexible timing and ensure availability at the assigned time for smooth property valuation. These are some of the key preparations that you have to do before the property valuation. Visit here to learn more- https://www.atticushomebuyers.com/we-buy-houses-racine/.