Part of the reverse mortgage process includes having an appraisal performed on your home. The proceeds from a reverse mortgage are determined using your age and the value of your home. The appraisal will help establish your home’s value.
Why do I need an appraisal?
An appraisal is required by the Federal Housing Administration (FHA) to determine your home’s value and to make sure your home is safe and structurally sound. FHA mandates that a licensed appraiser inspect the home for items that may represent a risk to your health and safety of the soundness of the property. Minor cosmetic issues are typically not a concern.
What will the appraiser be doing?
A licensed appraiser will inspect the interior and exterior of your home. The interior inspection is a walk-through. The appraiser may turn on and off some light switches and run water in the sink or flush the toilets. Also, the FHA requires the appraiser to visually inspect the attic and crawlspace. The appraiser will take notes, draw a diagram of your home, and photograph the interior. The exterior inspection consists of the appraiser taking pictures of your home and measurements, in addition to inspecting the exterior, roof, windows, and foundation. If you have a well and septic tank, the appraiser will need to measure the distance between them and the home. The appraiser may also include areas that need repair.
How long will the appraisal inspection take?
Although it varies, a typical inspection takes about an hour to complete.
What happens after the appraiser leaves?
The appraiser will look at comparable homes in your local area as part of the process for determining the home value. The appraiser generally needs a few days to complete the entire appraisal report. Once the appraisal report is complete, the appraiser will submit the report to the lender.
Will I need a second appraisal?
As of October 2018, the FHA performs a Risk Assessment for each appraisal.1 The FHA will determine if the appraisal is acceptable or if a second appraisal is required. This review generally takes 24 hours for the FHA to make a determination.
Tips to Help You Prepare for Your Inspection
- Provide unobstructed access to the attic and crawl space. The appraiser will need to look inside.
- Ensure your smoke detectors are installed and functioning.
- Ensure your water heater has proper strapping.
- Ensure you have carbon monoxide detectors installed and functioning.
- There is no need to scrub your house clean. Appraisers do not judge based on cleanliness or housekeeping skills, but decluttering can help the appraiser see your home a bit better.
If you have questions about the reverse mortgage appraisal process or about a reverse mortgage in general, call 1-800-976-6211 to speak with a licensed loan officer who can help provide you with the facts you need.
1HousingWire. FHA to require second appraisal on select reverse mortgages. (September 28, 2018) https://www.housingwire.com/articles/46970-fha-to-require-second-appraisal-on-select-reverse-mortgages