Refinancing your home can be a smart financial move—whether you’re looking to lower your interest rate, adjust your loan term, or tap into your home’s equity—and it all starts with a home appraisal to determine your property’s current market value.

Just like with a home purchase, the appraisal serves as a safeguard for both the lender and the homeowner, confirming the property’s market value and ensuring the loan amount makes financial sense. In this guide, we’ll walk you through everything you need to know about home appraisals for refinancing, including why they matter, how the process works, and what you can do to prepare for success.

Why Do You Need an Appraisal to Refinance?

When refinancing, your lender is issuing a brand-new loan to replace your existing mortgage. To do this responsibly, they must determine the current value of your home. The appraisal provides this critical piece of information and impacts several factors of your refinance, including:

• Loan-to-Value Ratio (LTV): This is the percentage of your loan compared to your home’s appraised value. A lower LTV ratio can help you qualify for better interest rates.

• Private Mortgage Insurance (PMI): If your LTV falls below 80%, you may be able to eliminate PMI, reducing your monthly payments.

• Cash-Out Refinance Eligibility: If you’re looking to borrow against your home equity, a higher appraisal means more available equity.

Ultimately, the appraisal plays a major role in determining whether your refinancing goals—like lowering your rate or pulling out cash—are achievable.

Types of Refinancing and the Role of Appraisals

Not all refinancing is created equal. The appraisal’s importance can vary depending on the type of refinance you’re pursuing:

1. Rate-and-Term Refinance

This type is focused on adjusting the interest rate, the loan term, or both—without changing the amount borrowed. The appraisal ensures your home’s current value still supports the loan amount, especially if market conditions have changed since your original mortgage.

2. Cash-Out Refinance

This option allows you to convert home equity into cash. The appraisal is critical here, as it determines how much equity you actually have. For instance, if your home appraises at $500,000 and you owe $350,000, you may be eligible to borrow a portion of the $150,000 in equity—typically up to 80%.

3. FHA or VA Streamline Refinance

Government-backed refinance options like FHA or VA Streamlines may allow borrowers to refinance without a full appraisal, provided certain criteria are met. However, if you’re doing a conventional refinance or need to access equity, an appraisal will almost always be required.

What to Expect from the Refinance Appraisal Process

Although the purpose may differ slightly, the refinance appraisal process is nearly identical to the one used during a home purchase. Here’s what you can expect:

Step 1: Lender Orders the Appraisal

Once you submit your refinance application, your lender will hire a licensed appraiser—often through a third-party appraisal management company (AMC)—to assess the home.

Step 2: Appraiser Conducts an On-Site Visit

The appraiser will schedule a time to visit your home. During the inspection, they’ll evaluate:

• Square footage and layout

• Interior and exterior condition

• Structural integrity

• Quality of materials and finishes

• Recent renovations or upgrades

• Functional systems (HVAC, plumbing, electrical)

• Landscaping and curb appeal

Step 3: Market Analysis Using Comparable Sales

The appraiser reviews recently sold homes in your area (called “comps”) that are similar in size, age, condition, and location. These comparisons help determine your home’s market value.

Step 4: Final Appraisal Report

Within a few days of the visit, the appraiser submits a detailed report to the lender. This document includes property data, photographs, analysis of comps, and ultimately, a final estimated value.

Lenders then use this figure to confirm the loan amount, determine LTV, and finalize the terms of your refinance.

Tip: Working with a local appraisal expert like Eagle Home Appraisal in Gilbert ensures your home is evaluated by someone who understands regional trends, neighborhood variations, and current market dynamics.

How to Prepare for a Refinance Appraisal

While you can’t control market conditions, you can take steps to make your home more appealing and improve its appraised value. Here’s how to prepare:

1. Clean and Declutter

A neat and tidy home gives the impression of being well-maintained. While cleanliness doesn’t directly affect value, it helps appraisers clearly assess features without distraction.

2. Handle Minor Repairs

Fix cosmetic issues and minor functional problems. Things like dripping faucets, cracked tiles, peeling paint, or burned-out lightbulbs may seem small—but collectively, they can influence the appraiser’s perception of your home’s condition.

3. Showcase Upgrades

Have you recently remodeled your kitchen, replaced your roof, or installed energy-efficient windows? Create a list of recent improvements, including:

• Project description

• Date of completion

• Cost of work

• Receipts, if available

Share this with the appraiser to ensure these upgrades are factored into the valuation.

4. Enhance Curb Appeal

First impressions matter. Mow the lawn, trim bushes, sweep walkways, and consider a fresh coat of paint on the front door or shutters.

5. Allow Full Access

Make sure the appraiser can access all areas of the home, including the basement, attic, garage, and utility rooms. Blocked-off spaces could delay the process or result in an incomplete appraisal.

What If the Appraisal Comes in Low?

A lower-than-expected appraisal can disrupt your refinance plans, especially if you’re relying on a certain LTV or planning to cash out equity. But all is not lost—here are your options:

• Request a Reconsideration of Value (ROV): If you believe the appraisal missed key comps or didn’t reflect upgrades, submit a formal dispute with supporting documentation.

• Reduce Loan Amount or Bring Cash to Closing: Lowering the loan amount can help meet LTV requirements.

• Make Home Improvements and Try Again: Invest in high-impact upgrades (like a new roof or updated kitchen), then reapply for refinancing after boosting value.

• Seek a Second Opinion: You may be able to request a second appraisal, although this depends on your lender’s policy.

Partnering with a reliable, experienced appraiser—such as Eagle Home Appraisal in Gilbert—can reduce the chance of an inaccurate or low appraisal. Their deep understanding of the local market ensures fair, realistic valuations that truly reflect your property’s worth.

Final Thoughts

An appraisal is one of the most crucial steps in the refinance process. It determines how much equity you can access, whether you can eliminate PMI, and what interest rate you’ll qualify for. And while the appraisal itself is out of your hands, your preparation can significantly influence the result. Understanding how upgrades and renovations affect home appraisals can help you make smart improvements that boost value and maximize your refinance potential.

Whether you’re looking to lower your monthly payment, shorten your loan term, or tap into your home’s value, being proactive will put you in the best position. Clean, repair, and highlight your home’s features—and be sure to work with trusted local professionals.If you’re in the Gilbert area, consider Eagle Home Appraisal for your refinance needs. With local expertise, a commitment to accuracy, and fast turnaround times, they’ll help ensure your refinance journey starts off on the right foot.

Ready to refinance?
Start with a strong appraisal. Contact Eagle Home Appraisal in Gilbert today for trusted, professional home evaluations you can rely on.