VA home loans are one of America’s most affordable homebuying options today. The appraisal process is central to securing a VA loan—it’s an essential step. To complete that step, you need to deal with VA appraisal fees.
The VA appraisal process is there to ensure the property in question meets the Department of Veterans Affairs standards for:
- Safety
- Security
- Value
Understanding VA appraisal fees is fundamental for those who want to utilize this benefit. It affects the overall VA loan process and the financial planning required for purchasing a home.
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Why are there VA appraisal fees?
VA appraisal fees are charged for the professional evaluation of a home’s value and condition—a mandatory requirement in the VA loan approval process.
These fees are paid to licensed appraisers to conduct a thorough assessment, ensuring the property meets the VA’s Minimum Property Requirements (MPRs).
Home appraisal serves dual purposes:
- Protecting the buyer from overpaying for a home
- Ensuring the loan amount does not exceed the home’s true value
Appraisers assess everything from structural integrity to the operational efficiency of the home’s systems, looking for any issues that may affect the property’s:
- Safety
- Habitability
- Or market value
The two biggest factors influencing VA appraisal fees
- Geographical location: Appraisal fees can vary significantly from one region to another, reflecting the local cost of living and the complexity of appraising properties in that area.
- Type of property: Whether it’s a single-family home, a multi-unit property, or a condominium, the type of property will also impact the fee. Complex properties or those with unique features may require more time and expertise to appraise, thus attracting higher fees.
Current VA appraisal fee standards
The VA sets appraisal fee standards, periodically updating them to reflect current market conditions.
These standards ensure fees are reasonable and fair, both to the appraisers for their professional services and to the veterans and service members paying them.
However, because these fees can vary by region, it’s essential to consult the VA’s list of appraisal fees for the most accurate and up-to-date information.
Payment and processing of VA appraisal fees
The responsibility for paying the appraisal fee will generally fall to the homebuyer. It’s payable at the time of appraisal request or closing, depending on the lender’s policies.
Payment can be made through various methods ensuring flexibility for the borrower, including:
- Credit cards
- Checks
- Electronic transfers
Important note: This fee is separate from closing costs and is paid directly for the appraisal service as part of the loan processing phase.
What happens after the appraisal?
Once a VA appraisal is completed, the appraiser issues a Notice of Value (NOV), a document that outlines the appraised value of the property and any repairs required to meet the VA’s minimum property requirements.
This NOV is vital to the loan approval process, ensuring the loan amount does not exceed the property’s value and that the property is safe and habitable.
The appraisal fee is, therefore, an integral part of moving the VA loan forward, bridging the initial application phase to the final loan approval and closing stages.
Note: The NOV also allows you to renegotiate your purchase price if the appraisal comes in lower than expected.
Challenges with VA appraisals and fees
Borrowers may encounter challenges such as:
- Discrepancies in the appraised value versus the sale price
- Delayed appraisal timelines
- Confusion over appraisal fees
The best way to deal with any difficulties is by addressing these challenges directly with our lender. Clear communication with your lender and understanding your rights in the appraisal process will go a long way toward a smoother process.
For discrepancies in value, consider requesting a Reconsideration of Value through your lender if you have concrete evidence that supports a higher valuation.
Comparing VA appraisal fees to other loan types
VA appraisal fees are generally comparable to those for conventional and FHA loans. However the overall costs of VA loans are often lower when considering the absence of private mortgage insurance (PMI) and potentially lower interest rates.
This makes VA loans more cost-effective in the long run, despite similar upfront appraisal costs.
Additionally, the VA’s regulation of appraisal fees ensures that veterans are not overcharged, providing an added layer of protection not always present with other loan types.
FAQs on VA Appraisal Fees
Q: Who pays for the VA appraisal?
A: The homebuyer is typically responsible for the appraisal fee.
Q: Can I choose my appraiser?
A: No, the VA assigns an independent VA-approved appraiser.
Q: What if the appraisal is lower than the purchase price?
A: You can negotiate the price, pay the difference, or cancel the purchase agreement.
VA appraisal fees: Conclusion
Understanding VA appraisal fees is essential for veterans and active military members who want to use the VA loan program.
These fees are a critical part of securing your mortgage, offering significant long-term benefits despite the upfront costs.
By familiarizing yourself with the appraisal process and associated fees, you can ensure a smoother path to homeownership.
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Our advise is based on experience in the mortgage industry and we are dedicated to helping you achieve your goal of owning a home. We may receive compensation from partner banks when you view mortgage rates listed on our website.
