If you hate digging into your wallet to pay for a home appraisal, new federal banking regulations may provide you with some relief.
The new rules — which recently were published in the Federal Register and took effect this month — state that homes sold for $400,000 or less do not require an appraisal conducted by a licensed professional.
That is a higher sales-price threshold than the previous standard, which was $250,000.
Not having to pay for an appraisal can save home shoppers hundreds of dollars.
It is important to note that the new rule will not apply to loans insured by a government agency. That includes loans backed by Fannie Mae or Freddie Mac, and mortgages issued through programs under the purview of the Federal Housing Administration or Department of Veterans Affairs, according to Money magazine.
Also, Money reports that lenders may still seek appraisals for some property transactions at or below the $400,000 mark. But they could be an alternative type of appraisal, such as via an automated valuation model, rather than a traditional appraisal by a professional.
Shopping for the best mortgage rate
If you are looking for a new home, know that the mortgage rate you obtain can have a huge impact on your housing costs — both now and in the future. As we have noted:
“Homes are the biggest on-credit purchases many of us will probably make, and with six-figure home prices come five-figure amounts of interest — or more.”
So, arm yourself with a little knowledge before looking for a home loan. You’ll get the lay of the land in your neck of the woods by reading “The True Cost of a Mortgage in Every State.”
Deepen your education about shopping for a home loan by checking out:
What advice would you give to home shoppers? Share your wisdom in comments below or on our Facebook page.