An appraisal fee is typically required in a cash out refinance to determine the current market value of the property. The appraisal is used by the lender to determine the loan-to-value (LTV) ratio, which is the relationship between the loan amount and the property value. The LTV ratio helps the lender to assess the risk of the loan and determine the interest rate and loan terms.
The appraisal fee covers the cost of hiring a professional appraiser to inspect and evaluate the property, gather information about comparable properties in the area, and prepare a written report on the property value. The fee can range from a few hundred dollars to over a thousand dollars, depending on the complexity of the appraisal and the location of the property.
In a cash out refinance, the appraisal fee is usually paid at closing as part of the closing costs. The cost of the appraisal is typically passed on to the borrower as part of the loan.
How much is the appraiser fee in cash out refinance?
The cost of an appraisal in a cash out refinance can vary depending on several factors, including:
- Location of the property
- Size and type of the property
- Complexity of the appraisal
- Appraiser’s experience and credentials
On average, an appraisal fee for a single-family home can range from $300 to $700, but the cost can be higher or lower depending on the specific circumstances. It is best to get a quote from a few different appraisers to compare the cost and choose the best option. The quote should include all costs associated with the appraisal, including any travel expenses and preparation of the report.
This is a supplementary post to: What Is A Cash Out Refinance In Real Estate Investing?