Refinance vs. Purchase Appraisal: Key Differences That Could Save You Time & Money

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.

• 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.

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.

• 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

• Purchase Appraisal: Validates the price agreed upon in the sales contract.
• Refinance Appraisal: Confirms the current market value for equity-based lending.

• Purchase: Ordered soon after contract acceptance; timing is critical.
• Refinance: Can be scheduled more flexibly, sometimes even waived if eligibility is met.

• Purchase: Often more strict since it protects a new investment.
• Refinance: Lenders may use automated valuation models (AVMs) or desktop appraisals.

• Purchase: Rarely waived.
• Refinance: Fannie Mae/Freddie Mac may grant an appraisal waiver if LTV and risk metrics are favorable.

• 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.

A conventional refinance with a low loan-to-value ratio may qualify for an appraisal waiver, saving you both time and fees.

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.

Don’t just assume your refinance will need an appraisal. Ask your lender upfront if you qualify for a waiver.

If you want a mortgage experience built on transparency and cost-efficiency, check out:

• realpha – A commission-free homebuying platform that simplifies the process for first-time buyers.
• Be My Neighbor – A licensed mortgage partner offering client-first lending options with NMLS #1743790.

Understanding the difference between a refinance and purchase appraisal isn’t just about saving money—it’s about being prepared. Appraisals set the tone for your loan’s approval and speed, so knowing what to expect gives you a strategic advantage.

If you’re buying or refinancing, start smart.

• Be My Neighbor offers expert guidance across every stage of the mortgage.
• realpha eliminates commission fees to make homeownership more affordable.

Why pay more for less clarity? Know your options. Know your value.

Yes, if your loan is eligible (often based on credit, LTV, and type of loan), your lender may waive the appraisal entirely.

Typically, yes. Refinance appraisals may use automated systems and have more flexible valuation methods.

In purchases, usually the buyer. In refinances, it may be the borrower or covered by the lender.

Indirectly. A lower appraised value may affect your LTV, which could impact pricing.

Generally 90 to 120 days, but this may vary by lender.

Disclaimer: All information provided is general and for educational purposes only. Mortgage products are subject to approval. Rates, terms, and availability may vary. NMLS #1743790. Not affiliated with any government agency.