If you plan to use a VA loan to buy a home in Orem, Utah, understanding the difference between a property appraisal and a property inspection is crucial.
While the steps are similar, as both involve individuals assessing a property, appraisals and inspections have different purposes. Below, the mortgage professionals at Intercap Lending explain what each entails and the role they play in the VA loan process.
What Is a VA Appraisal?
To purchase an Orem home with a VA loan, an appraisal is required. The primary purpose is to determine the fair market value of the property and ensure that it complies with the VA Minimum Property Requirements (MPRs). The MRPs, designed to confirm that the home meets essential health and safety standards, protect the interests of the homebuyer, the Department of Veterans Affairs and the mortgage lender.
During an appraisal, a local licensed appraiser thoroughly inspects the property, assessing its size, condition, features and livability. Their evaluation is instrumental in determining the maximum amount the VA will guarantee for a home loan, as it provides an unbiased opinion of the property’s value given the current situation.
What is a Property Inspection?
While a VA appraisal offers a broad view of how things stand at a property, an inspection is more like a close-up. Getting one isn’t a requirement to be approved for a VA loan, but skipping the step would be ill-advised. After all, appraisers aren’t trained as inspectors, and it isn’t their job to uncover all potential issues with a home’s condition.
During an inspection, a qualified professional digs into the nooks and crannies of the property, looking for signs of wear and tear, damage and safety concerns. An inspector identifies immediate and future maintenance needs. Their findings can empower a homebuyer to negotiate with the seller on repairs or a price adjustment.
How Much Do Appraisals and Inspections Cost?
As you might expect, homebuyers foot the bill for both VA appraisals and property inspections. With an appraisal being required, many VA loan providers stipulate that homebuyers must pay upfront to ensure the assessment cost is covered even if the mortgage doesn’t go to closing.
So, what does a property appraisal cost? According to the VA, homebuyers in Utah pay $675 for a single-family home or individual condominium. The price is higher for a manufactured home or multi-family residence, at $900 or $1,100, respectively.
As for the cost of an inspection, that can vary depending on the size of the property. The average is $360 for homebuyers in Utah, but the price can be upwards of $500. Inspectors typically charge less for newer homes, as they’re less likely to have structural issues and areas of concern.
Have questions? Or are you interested in applying for a VA loan? Either way, the mortgage professionals at Intercap Lending in Orem, Utah, are here to help. Contact us today!