How does the FHA appraisal timeline work? When does the house get appraised? What does the appraiser look for during his visit, and who pays for the appraisal?
These are some of the most common questions among home buyers who use FHA-insured mortgage loans to buy a house. Today, we’ll take a look at the FHA appraisal timeline.
Short answer: While the mortgage and home buying process can vary slightly from one person to the next, the FHA appraisal timeline is generally pretty consistent. It usually happens shortly after the buyer and seller have signed the contract. At that point, the mortgage lender will arrange for an appraisal to take place.
When Does the FHA Appraisal Happen?
For most purchase transactions, the FHA home appraisal takes place once the seller has accepted the home buyer’s offer. This is because the mortgage lender needs a signed copy of the purchase agreement to proceed with the appraisal.
After the buyer and seller have agreed on a purchase price and signed the contract, the mortgage lender will order an appraisal. In most cases, the lender will have the buyer pay for it up front. FHA appraisals are generally paid for in advance, as opposed to being rolled into closing costs. Though the process can vary, this is the standard practice.
Putting the FHA home appraisal into a broader timeline will help you understand the overall process. Here’s how it usually works:
- The home buyer gets pre-approved for an FHA-insured mortgage loan through a bank or lender that offers them. (Here’s how pre-approval works.)
- The buyers then shop for a house within their price range, using the pre-approval amount as a guide to affordability.
- The buyers find a home that meets all of their needs, and make an offer to purchase it.
- The seller accepts the offer, sometimes with a bit of back-and-forth negotiation.
- The home buyers then go back to their mortgage lender with a signed purchase agreement in hand, to move into the next phase of the process (appraisal, underwriting, etc.).
- The mortgage lender will select an FHA-approved home appraiser to conduct the property appraisal.
- The appraiser will conduct some real estate market research for the property being purchased, and then visit the home in question to complete the appraisal.
- While the FHA appraiser is mostly concerned with determining the market value, he will also review the home’s overall condition to make sure it meets HUD guidelines. (Learn more about property guidelines and requirements).
Note: This is a basic FHA timeline to show when the home appraisal takes place within the broader scope of the mortgage lending and purchase process. Some minor steps have been omitted the sake of simplicity.
How Long Does the Process Take?
Another common question is: How long does the FHA home appraisal process take?
In most cases, the appraisal can be completed within a matter of days. But this will depend on the appraiser’s workload, efficiency, and other factors.
The property visit itself usually only takes a few hours. But the appraiser has some other research to do as well, such as reviewing comparable sales. So the entire appraisal process might take several business days. We know of some appraisers who can complete the process within a day or two, though this might be faster than average.
When it comes to the timeline, you have to realize that everyone wants the same thing. The lender wants the loan to close on time as much as you do — or nearly as much. They will do everything within their power to ensure that the FHA appraisal is completed in a timely fashion.
As the borrower, the best thing you can do during this process it to stay in touch with your loan officer. The appraisal itself will happen without any input from you.