January 21, 2026
8 minutes
You’re about to either refinance your current mortgage or buy a new home, but then comes the appraisal. That single step can make or break your timeline, budget, or even the entire deal. So, how do you know what to expect? Here’s the truth: Refinance and purchase appraisals may sound similar, but they serve very different purposes.
Heads up, this guide breaks it all down, from cost differences and lender expectations to when you might qualify for an appraisal waiver. Whether you’re a first-time buyer, seasoned investor, or just trying to lower your interest rate, this could be a serious edge.
Let’s sort through the confusion so you can move forward with confidence.
Key Takeaways:
- Refinance appraisals focus more on current market value; purchase appraisals emphasize sale price.
- Purchase appraisals are often more scrutinized due to lender risk and sales contract validation.
- Refinance appraisals may offer flexibility, including appraisal waivers.
- Appraisal costs vary by loan type and market conditions.
- Understanding each process empowers better mortgage decisions.
What Is a Mortgage Appraisal?
A mortgage appraisal is a third-party, unbiased estimate of a home’s market value. Lenders use this figure to ensure the loan amount requested is supported by the property’s actual worth.
Appraisals Are Used To:
- Protect the lender’s investment
- Determine the loan-to-value ratio (LTV)
- Confirm the home is priced appropriately
- Identify potential red flags with the property
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What’s the Difference Between Refinance and Purchase Appraisals?
1. Intent of the Appraisal
- Purchase Appraisal: Validates the price agreed upon in the sales contract.
- Refinance Appraisal: Confirms the current market value for equity-based lending.
2. Timing & Process
- Purchase: Ordered soon after contract acceptance; timing is critical.
- Refinance: Can be scheduled more flexibly, sometimes even waived if eligibility is met.
3. Scrutiny & Documentation
- Purchase: Often more strict since it protects a new investment.
- Refinance: Lenders may use automated valuation models (AVMs) or desktop appraisals.
4. Waivers and Exemptions
- Purchase: Rarely waived.
- Refinance: Fannie Mae/Freddie Mac may grant an appraisal waiver if LTV and risk metrics are favorable.
Why Refinance Appraisals Might Be Easier?
- You already own the home, which may increase lender confidence.
- Equity position is typically stronger.
- Automated data can supplement or replace physical inspection.
- Waiver eligibility is more common with strong credit and low LTV.
Pro Tip:
A conventional refinance with a low loan-to-value ratio may qualify for an appraisal waiver, saving you both time and fees.
What’s the Cost Difference?
Appraisal fees vary, but here's a ballpark:
- Purchase Appraisal: $400–$750, often paid by the buyer.
- Refinance Appraisal: $300–$700, sometimes covered by the lender or rebated at closing.
How Does It Affect Your Loan?
Aspect | Purchase Appraisal | Refinance Appraisal |
|---|---|---|
Purpose | Validate sales price | Validate equity/value |
Cost | Often higher | May be waived or lower |
Process | In-person required | May use AVM/waiver |
| Risk to Lender | Higher | Lower (existing borrower) |
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Actionable Insight:
Don’t just assume your refinance will need an appraisal. Ask your lender upfront if you qualify for a waiver.
Trusted Tools & Platforms
If you want a mortgage experience built on transparency and cost-efficiency, check out:
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- reAlpha Mortgage – A licensed mortgage lender offering transparent, tech-forward lending solutions with a generous rebate stack for homebuyers (NMLS #1743790).
Conclusion: Smart appraisals. Smarter savings.
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FAQs
Can I get an appraisal waiver during a refinance?
Yes, if your loan is eligible (often based on credit, LTV, and type of loan), your lender may waive the appraisal entirely.
Is a refinance appraisal less strict than a purchase one?
Typically, yes. Refinance appraisals may use automated systems and have more flexible valuation methods.
Who pays for the appraisal?
In purchases, usually the buyer. In refinances, it may be the borrower or covered by the lender.
Can an appraisal affect my mortgage rate?
Indirectly. A lower appraised value may affect your LTV, which could impact pricing.
How long are appraisal reports valid?
Generally 90 to 120 days, but this may vary by lender.
Disclaimer: This content is for general informational purposes and not financial advice. All mortgage products are subject to credit approval and underwriting guidelines. Terms, rates, and conditions may vary by lender and borrower profile. reAlpha Mortgage is a licensed lender. NMLS #1743790. Not affiliated with any government agency.
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Article by
Rocky Billore is a mortgage industry leader and Chief Sales Officer with over two decades of experience across residential and commercial lending. Since entering the industry in 2004, he has been directly involved in funding more than $1.4 billion in loans. A recognized expert in VA and government lending, Rocky combines deep program knowledge with a data driven, relationship-first leadership style. His work focuses on building scalable sales organizations, developing high performing teams, and aligning technology with real world lending outcomes to improve the homeownership experience.