Refinancing a home involves plenty of moving parts, including credit pulls and closing costs.
Across the state, from Charlotte to Wilmington and beyond, we hear the question: Should I get a private appraisal before starting the refinance process with the bank?
The answer depends on your goals, but understanding the pros and cons can help you proceed with confidence, either way.
Let’s break it down.
What a Private Appraisal Can Tell You Before Refinancing
For homeowners in fast-growing areas like Davidson. Huntersville, or Leland, a private appraisal can be a smart first step. It gives you a clear, realistic picture of your home’s value before you even talk to a lender.
Nathan Jordan, TAG’s COO, explains:
“The pros are that you can know what your home is worth. That way, going into a refinance, you’re not relying on a Zillow number or an automated value that may not reflect the updates you’ve done to the home.”
This step is invaluable if you’ve made upgrades that public records may not capture, like:
- Kitchen or bathroom remodels– Adds major appeal and boosts value
- New flooring– Freshens the home and makes it more competitive
- Finished garage or attic– Especially valuable with heating and cooling
TAG Tip: If you’re in a market like Mooresville or Wilmington where home values shift quickly, given the influx of population year over year, a private appraisal can give you an advantage when deciding whether refinancing makes sense before you get started.
The Value of Clear Expectations in Refinancing
The biggest challenge we see isn’t homeowners overestimating their value; it’s the lack of knowledge homeowners have BEFORE starting the refinance process. A private appraisal clears that up.
Here’s how it helps:
- Avoid surprises: Major updates, like a new deck or remodeled kitchen, don’t always add dollar-for-dollar value. A private appraisal reveals precisely how the market perceives those significant changes.
- See the big picture: We don’t just run numbers, we provide clear guidance on condition, comparables, and your equity position, so you know what to expect before the bank gets involved.
- Save time and stress: If the numbers don’t make sense, you avoid unnecessary credit pulls and wasted effort.
- Have a backup plan: Having an appraisal done before the refinance can help if the bank’s appraisal doesn’t come back as strong as you’d hoped. Your private appraisal can serve as backup, especially if you need to request a reconsideration of value (ROV).
- Protect your credit: Every time a lender checks your credit, it leaves a mark that can lower your score. By starting with a private appraisal, you avoid multiple hits while shopping for lenders and maintain stronger financing options.
Nathan Jordan puts it simply, “The bank probably won’t accept your private appraisal, but you will know before you start if it’s even worth it to go down the refinancing road.”
Many homeowners hesitate because of the cost, about $450 for a private appraisal (depending on the real estate market). However, consider the potential savings in credit score protection and stronger negotiation power.
Why Equity Matters Before Refinancing
Before you even think about rates, it pays to understand how much equity you’re sitting on.
Many homeowners who purchased properties in the last 5-10 years have seen significant growth in equity, especially after the sharp appreciation during the COVID-19 pandemic. That equity can shape what refinancing makes possible for you.
For example:
- Reducing PMI: If your equity has passed the 20% threshold, you may be able to drop private mortgage insurance.
- Lowering monthly payments: Even if rates haven’t fallen much, shifting equity can reduce what you owe each month.
- Exploring cash-out options: Equity gives you flexibility, whether it’s for home improvements, debt consolidation, or other financial goals.
Nathan Jordan shared a real-world impact:
‘It’s amazing what 1% can do. One client saved $700 a month by refinancing, even though he bought just a year and a half ago.”
Know Your Worth, Then Refinance with Confidence
Refinancing doesn’t require a private appraisal, but it can provide clarity and confidence before you start the process with a bank.
From Charlotte to Wilmington, homeowners who order a private appraisal first:
- Avoid surprises
- Understand their equity
- Make smarter refinancing decisions
At TAG, we provide independent, reliable appraisals that help you know where you stand before lenders get involved. If you’re considering refinancing options and want to start with the facts, the TAG team is here to help you make the best move for your home and your future- TAG us in!
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