Who pays for the appraisal on a FHA loan?
When it comes to FHA loans, the borrower is typically responsible for paying for the appraisal. This cost is mandatory, as it ensures that the property being purchased is worth the amount being borrowed.
FHA loans are popular among first-time homebuyers and those with less-than-perfect credit. These loans are insured by the Federal Housing Administration, which allows lenders to offer more lenient guidelines and lower down payment requirements. However, one important cost associated with these loans is the appraisal fee.
Here are some commonly asked questions related to who pays for the appraisal on a FHA loan:
1. Are FHA appraisals more expensive than conventional appraisals?
Not necessarily. While the cost of an FHA appraisal can vary depending on the location and size of the property, it is generally comparable to a conventional appraisal.
2. Can the seller pay for the appraisal on a FHA loan?
No, the seller cannot pay for the appraisal on a FHA loan. This cost is typically the responsibility of the buyer.
3. Is the appraisal fee included in the closing costs for an FHA loan?
Yes, the appraisal fee is typically included in the closing costs for an FHA loan. These costs are usually paid at the time of closing.
4. Can the appraisal fee be rolled into the loan amount for an FHA loan?
No, the appraisal fee cannot be rolled into the loan amount for an FHA loan. This fee must be paid upfront by the borrower.
5. Does the appraisal affect the amount of the FHA loan?
Yes, the appraisal can affect the amount of the FHA loan. If the property appraises for less than the agreed-upon purchase price, the loan amount may be adjusted accordingly.
6. Who selects the appraiser for an FHA loan?
The lender is responsible for selecting the appraiser for an FHA loan. The appraiser must be approved by the FHA and meet certain criteria.
7. Can the borrower choose their own appraiser for an FHA loan?
No, the borrower cannot choose their own appraiser for an FHA loan. The lender is responsible for this selection process.
8. What factors does the FHA appraiser consider when valuing a property?
The FHA appraiser will consider factors such as the condition of the property, comparable sales in the area, and any required repairs or improvements.
9. How long is an FHA appraisal valid for?
An FHA appraisal is typically valid for 120 days. If the loan does not close within this timeframe, a new appraisal may be required.
10. Can an FHA appraisal be transferred to a different lender?
No, an FHA appraisal cannot be transferred to a different lender. If the borrower switches lenders, a new appraisal may be required.
11. Can the borrower challenge the results of an FHA appraisal?
Yes, the borrower can challenge the results of an FHA appraisal if they believe there are errors or inaccuracies. However, the lender will make the final decision on whether to accept the appraisal.
12. Are there any exceptions to who pays for the appraisal on a FHA loan?
In some cases, the seller may agree to pay for the appraisal on a FHA loan as part of negotiations. However, this is not common and is typically the responsibility of the buyer.