Whether you are purchasing a new home or just refinancing to save money, all lenders will require an appraisal during the approval process and underwriting in order to determine the home's fair market value. This is necessary because he loan's pricing (rate, points, fees and terms) is set based on the value of the home when compared to the size of the loan.
With an appraisal required as part of the loan approval process, the lender will order the report at the beginning of the underwriting process. These reports are requested thru an AMC (appraisal management company), which then randomly selects a licensed appraiser whom is qualified to produce a report for your home type in your general area.
In general, the report includes:
After gathering the information above, the appraiser then makes calculations and adjustments in order to determine a final value for the home. This value is used to determine the maximum loan amount available per the loan program guidlines, as well as final interest rate and points.
Appraisals are generally good for 120 days, afterwhich either a "recertification of value" (proving that the home is still worth at least as much as the original appraisal) or a new appraisal will be required.
Once the report is complete, approved by the underwirter, it is then sent to the borrowers for their information and records.