Appraisals and inspections are two very important parts of the homebuying process, both of which are designed to help protect the parties involved in the transaction. Whether you are a first-time homebuyer – or just looking for a refresher – understanding the difference between getting an appraisal vs. inspection done on your new home can be invaluable during the homebuying journey.
Buying a home can be a very big deal – often the biggest purchase your household will make all year. That means it’s good practice to be sure you are buying a home that is in good condition and is worth what you are paying for it. When purchasing with a conventional loan, inspections and appraisals are both set up to aid you and your lender in making sure all your due diligence is done before you move your family in.
In both cases, a qualified third party (an inspector or an appraiser) will come to view the property under contract. But while an inspection is intended to help a homebuyer identify any faults or safety problems with the home they are about to purchase, an appraisal is typically ordered on behalf of your mortgage lender to determine the property’s actual value.
These differences between a home appraisal vs. inspection apply to a conventional home loan. But what about other loan programs?
If you qualify for an FHA home loan, you will typically have a home inspection and appraisal, the same as with a “conventional” mortgage. But note that while FHA loans are sometimes referred to as “low-cost” mortgages, an FHA appraisal may actually cost a little more due to the additional work required of the appraiser by the Fair Housing Authority (FHA).
VA home purchases are typically subject to appraisal and inspection, just like any other home loan. VA loans, however, are appraised according to specific guidelines set forth by the Department of Veterans Affairs, so those who served our country can enjoy certain guarantees in their new home, like heat and a roof free of leaks. Like FHA appraisals, VA appraisals might cost more than a conventional appraisal, but many of our borrowers feel that the savings elsewhere make the VA appraisal and inspection worth every penny.
Whether you’re idly browsing Zillow or looking for a new lender before closing, your first point of contact at The Federal Savings Bank will be an expert loan officer, who can help you tailor a homebuying plan to your specific financial circumstances. A consultation requires no commitment and no money down – give our team a call today at 877-788-2520 to start planning for your financial future.