Skip navigation Text Only Site Map
Site Sections



What is an appraisal and who completes it?
What types of things will an underwriter look for when they review the appraisal?
Will I get a copy of the appraisal?
Are there any special requirements for condominiums?
I'm purchasing a home, do I need a home inspection AND an appraisal?
How long does it take for the property appraisal to be completed?
I've heard that some lenders require flood insurance on properties. Will you?
Does Alaska USA Mortgage Company provide financing for manufactured homes?
What resources are available to assist me in researching homes that are for sale?
 
Top

To determine the value of the property you are purchasing or refinancing, an appraisal will be required. An appraisal report is a written description and estimate of the value of the property completed by an appraiser. National standards govern not only the format for the appraisal; they also specify the appraiser's qualifications and credentials. In addition, most states now have licensing requirements for appraisers evaluating properties located within their states.

Usually the appraiser will inspect both the interior and exterior of the home. However, in some cases, only an exterior inspection will be necessary based on your financial strength and the location of the home. Exterior-only inspections usually save time and money, but if you're purchasing a new home, your Loan Originator will contact you to determine if you'd be more comfortable with a full inspection.

After the appraiser inspects the property, they will compare the qualities of your home with other homes that have sold recently in the same area. These homes are called "comparables" and play a significant role in the appraisal process. Using industry guidelines, the appraiser will try to weigh the major components of these properties (i.e., design, square footage, number of rooms, lot size, age, etc.) to the components of your home to come up with an estimated value of your home. The appraiser adjusts the price of each comparable sale (up or down) depending on how it compares (better or worse) with your property.

As an additional check on the value of the property, the appraiser also estimates the replacement cost for the property. Replacement cost is determined by valuing an empty lot and estimating the cost to build a house of similar size and construction. Finally, the appraiser reduces this cost by an age factor to compensate for depreciation and deterioration.

If your home is for investment purposes, or is a multi-unit home, the appraiser will also consider the rental income that will be generated by the property to help determine the value.

Using these three different methods, an appraiser will frequently come up with slightly different values for the property. The appraiser uses judgment and experience to reconcile these differences and then assigns a final appraised value. The comparable sales approach is the most important valuation method in the appraisal because a property is worth only what a buyer is willing to pay and a seller is willing to accept.

It is not uncommon for the appraised value of a property to be exactly the same as the amount stated on your sales contract. This is not a coincidence, nor does it question the competence of the appraiser. Your purchase contract is the most valid sales transaction there is. It represents what a buyer is willing to offer for the property and what the seller is willing to accept. Only when the comparable sales differ greatly from your sales contract will the appraised value be very different.

 
Top
In addition to verifying that your home's value supports your loan request, we'll also verify that your home is as marketable as others in the area. We'll want to be confident that if you decide to sell your home, it will be as easy to market as other homes in the area.

We certainly don't expect that you'll default under the terms of your loan and that a forced sale will be necessary, but as the lender, we'll need to make sure that if a sale is necessary, it won't be difficult to find another buyer.

We'll review the features of your home and compare them to the features of other homes in the neighborhood. For example, if your home is on a 20-acre lot, or has a large accessory building, we'll want to make sure that there are other homes in the area on similar size lots or with similar outbuildings. It is hard to place a value on such unique features if we can't see what other buyers are willing to pay for them. In some areas, additional acreage or outbuildings could actually be a detriment to a future sale. Finding comparable properties can be more challenging in rural areas where it is more difficult to find homes that have similar features.

We'll also make sure that the value of your home is in the same range as other homes in the area. If the value of your home is substantially more than other homes in the neighborhood, it could affect the market acceptance of the home if you decide to sell.

We'll also review the market statistics about your neighborhood. We'll look at the time on the market for homes that have sold recently and verify that values are steady or increasing.
 
Top

As soon as we receive your appraisal, we'll update your loan with the estimated value of the home. As a standard practice we will provide a copy of your appraisal at closing. If you’d like to review it earlier, your Loan Originator would be happy to provide it to you.

 
Top
Since the value and marketability of condominium properties is dependent on items that don't apply to single-family homes, there are some additional steps that must be taken to determine if condominiums meet our guidelines.

One of the most important factors is determining if the project that the condominium is located in is complete. In many cases, it will be necessary for the project, or at least the phase that your unit is located in, to be complete before we can provide financing. The main reason for this is, until the project is complete, we can't be certain that the remaining units will be of the same quality as the existing units. This could affect the marketability of your home.

In addition, we'll consider the ratio of non-owner occupied units to owner-occupied units. This could also affect future marketability since many people would prefer to live in a project that is occupied by owners rather than renters.

We'll also carefully review the appraisal to insure that it includes comparable sales of properties within the project, as well as some from outside the project. Our experience has found that using comparable sales from both the same project as well as other projects gives us a better idea of the condominium project's marketability.

Depending on the percentage of the property's value you'd like to finance, other items may also need to be reviewed.
 
Top

Both a home inspection and an appraisal are designed to protect you against potential issues with your new home. Although they have totally different purposes, it makes the most sense to rely on both to help confirm that you've found the perfect home.

The appraiser will make note of obvious construction problems such as termite damage, dry rot or leaking roofs or basements. Other obvious interior or exterior damage that could affect the salability of the property will also be reported.

However, appraisers are not construction experts and won't find or report items that are not obvious. They won't turn on every light switch, run every faucet or inspect the attic or mechanicals. That's where the home inspector comes in. They generally perform a detailed inspection and can educate you about possible concerns or defects with the home.

Accompany the inspector during the home inspection. This is your opportunity to gain knowledge of major systems, appliances and fixtures, learn maintenance schedules and tips, and to ask questions about the condition of the home.

 
Top

Licensed appraisers who are familiar with home values in your area perform appraisals. We order the appraisal as soon as the Appraisal Fee is paid. Generally, it takes three to six weeks before the written report is sent to us. We follow up with the appraiser to insure that it is completed as soon as possible. If you are refinancing, and an interior inspection of the home is necessary, the appraiser should contact you to schedule a viewing appointment. If you don't hear from the appraiser within seven days of the order date, please inform your Loan Originator. If you are purchasing a new home, the appraiser will contact the real estate agent, if you are using one, or the seller to schedule an appointment to view the home.

 
Top

Federal Law requires all lenders to investigate whether or not each home they finance is in a special flood hazard area as defined by FEMA, the Federal Emergency Management Agency. The law can't stop floods. Floods happen anytime, anywhere. But the Flood Disaster Protection Act of 1973 and the National Flood Insurance Reform Act of 1994 help to ensure that you will be protected from financial losses caused by flooding.

We use a third party company who specializes in the reviewing of flood maps prepared by FEMA to determine if your home is located in a flood area. If it is, then flood insurance coverage will be required, since standard homeowner's insurance doesn't protect you against damages from flooding.

 
Top

Alaska USA Mortgage Company offers a limited number of programs for manufactured home financing. These programs are typically fixed-rate in nature, and often require a minimum downpayment of 10%.

We define manufactured housing as housing units that are factory built with a steel undercarriage that remains as a structural component and limits the structure to a single story. These types of manufactured homes are sometimes known as mobile homes. We do not consider other factory-built housing (not built on a permanent chassis), such as modular, prefabricated, panelized, or sectional housing, to be manufactured housing. If your home is one of these types, please complete the application indicating that your home is a single family home.

In order to qualify for our loan programs a manufactured home must meet the following requirements:

  • A manufactured home is any dwelling built on a permanent chassis and attached to a permanent foundation system.
  • Be a one-family dwelling that is legally classified as real property.
  • The towing hitch, wheels, and axles must have been removed and the home must be permanently attached to a foundation system that meets state and local codes as well as the manufacturer’s requirements.
  • Foundation system must be appropriate for the soil conditions for the site and meet local and state codes.
  • The land on which the manufactured home is situated must be owned by you. We do not provide financing for manufactured homes located on rented or leased land.
  • Must have been built in compliance with the Federal Manufactured Home Construction and Safety Standards that were established June 15, 1976. Generally, compliance with these standards will be evidenced by the presence of a HUD Data Plate that is affixed near the main electrical panel of the home or in another readily accessible and visible location.
  • Must be acceptable to typical purchasers in the market area.
  •  
    Top

    For homes in the states of Alaska and Washington, www.realtor.com is a good website to research homes for sale. Searches can be processed based on your specific desires, including location, purchase price, and property type as well as the number of bedrooms, bathrooms or size of garage sought. MLS Alaska is also a good resource if you are looking to purchase in the state of Alaska – searches can be conducted utilizing a map.

    Of course, there are always the basic methods for finding a home by reading your local newspaper and local magazines. Look in the classified section of your local newspaper and you’ll find listings submitted by different real estate agents as well as homes for sale directly by the owner. Many businesses, including Alaska USA, carry the Homes & Land Magazine which has advertisements specific to the region and usually include property photos. The magazine is also available on the Internet, allowing nationwide searches to be conducted by city, map, or zip code. Homes that are for sale by owner (FSBO), when the Seller chooses not to work with a real estate agent, can be searched and located on the Internet. Click here for homes in Alaska, or here for homes in Washington.

    Alaska USA Mortgage Company and Alaska USA Federal Credit Union are committed to provide you with the best financing programs available to assist you in achieving your dream of becoming a home owner!

    Ready to apply? Click here!

    Contact Us

    Alaska: (800) 737-3033

    California: (877) 722-8919

    Washington: (800) 813-1799

    View all office locations

    Equal Housing Lender NCUA© Copyright 2009 MortgageBot LLC and Alaska USA Mortgage Company - All rights reserved.
    Regulated by the National Credit Union Administration (NCUA), an agency of the U.S. Government.

    Online Application: Site Security | Privacy Policy | Terms Of Use | What To Expect