July 13, 2015
Based on the reader questions we get in our comments section, there can be some confusion over the nature of FHA appraisals, appraisal fees, and compliance inspections.
The appraisal process is an important part of the overall experience of buying a home with an FHA mortgage loan; borrowers should budget for appraisal fees and anticipate needing to pay for a compliance inspection (just in case).
The appraisal process can include a required compliance inspection should the appraiser note conditions that must be corrected as a condition of loan approval. The compliance inspection requires a separate fee and when it’s time to budget for the appraisal process the borrower should assume the compliance inspection might be required.
The amount of the appraisal fee and compliance inspection fee will vary depending on where you are buying the home. Check with your loan officer or contact the FHA directly for information on appraisal fees in your housing market.
One thing borrowers sometimes misunderstand–the situation where an appraiser deems a home to be unsuitable for an FHA loan. Some will ask why they have to pay for the appraisal when this occurs, or why they must pay when the appraisal is finished but the loan winds up not going through after all for one reason or another.
It’s important to remember that an FHA appraisal is the same type of expense as having your car repaired–the money you pay is for services rendered. That’s why you will be required to pay for an appraisal regardless of what happens after that appraisal is finished. The FHA appraiser is providing a service which must be paid for–the payment is not tied in any way to the outcome of that service.
Do you have questions about FHA loans? Ask us in the comments section. All questions and comments are held for moderation.
Joe Wallace has been specializing in military and personal finance topics since 1995. His work has appeared on Air Force Television News, The Pentagon Channel, ABC and a variety of print and online publications. He is a 13-year Air Force veteran and a member of the Air Force Public Affairs Alumni Association. He was Managing editor for www.valoans.com for (8) years and is currently the Associate Editor for FHANewsblog.com.
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