The VA Appraisal: Should You Be Concerned?
If your current VA loan isn’t your first time around you should remember that the VA loan approval actually contains two approvals; one approval for you and one for the property. Your loan approval is contingent upon expected issues such as your current gross income, your employment history, your current and future debt load and how much money you have in the bank. But you could make 10 times the amount needed to qualify for a VA loan and have a gazillion dollars in your checking account but if the property doesn’t meet VA requirements then the loan will not be approved. Should you be afraid of your VA appraisal?
One of the reasons perhaps that VA appraisals still make some real estate agents a bit queasy is due to how VA appraisals were once completed. The VA used to order the appraisal and evaluate the appraisal independently of the mortgage company. This process made the VA loan approval much longer than what occurs today but just the notion of the bureaucracy involved with the VA and an appraiser visiting an area for perhaps the first time caused many to be afraid of the VA appraisal.
Today however, the process is much smoother. The individual VA approved lender is responsible for ordering the appraisal and is done so by placing the order with an independent appraisal management company. The VA appraisal should take no more time than any other appraisal.
Yes, the VA appraisal does have a separate inspection process compared to other mortgage programs but in reality the inspection is simply making sure the property is safe, habitable and in good condition. The VA calls these conditions the Minimum Property Requirements.
The only time there really should be a concern regarding a VA appraisal is when an appraisal is done in times of falling home values. It can happen that a property appraises less than what the sales contract says. In this case, the veteran can negotiate the price lower to reflect the value, come in with the difference or walk from the transaction.