When you do a mortgage refinance on your home, you will usually need to get a new appraisal so that the lender knows that they can sell the home for the amount they are lending if you were to ever default on the loan. The appraisal is a vital part of the typical mortgage loan process. Before you refinance your home, you should consider doing some renovations to increase the value of the property. There are some common renovations that will generally increase your home’s value. And you don’t have to always break the bank to do some of them!

Why Do Renovations Before Appraisal?

When the appraiser sends you the appraisal report, it can make or break qualifying for your desired loan. If your home does not appraise for your desired value, you could even have difficulty refinancing at all. That sucks. Obviously, any upgrades that you have made to your home since you bought it are not reflected in your original appraisal.

Here are some tips to increase your home’s value according to the experts:

1. Paint and declutter

As we said above, there are some simple things you can do that are not going to drain your savings account. Painting the main living areas of your home with modern paint schemes can take many years off of an outdate home. If your home’s walls are scuffed and there is clutter on the floors, a new coat of paint and organizing your home can help to increase the value of the home. And good paint only costs $20 or so per gallon.

2. Replace old carpet and flooring

This is a major upgrade that appraisers notice in a good way. New flooring and carpet that looks like hardwood can add a few thousand dollars to the value of your home. If you can’t afford to replace all of the flooring, focus on the heavily trafficked areas with the most wear. And then just have your carpeting professionally cleaned. Many people do not realize it is quite inexpensive to replace old flooring, especially if you DIY.

3. Update kitchen and bathrooms

Modernizing these spaces can really add value to the home. And you don’t have to gut them down to the studs either. Remember to give everything a good cleaning in the bathroom and kitchen. But you can do some inexpensive upgrades that add value:

  • Take out old wallpaper
  • Refinish any laminate countertops
  • Paint cabinets
  • Put in new faucets
  • Make sure all drains are unclogged and drain freely
  • Put in modern light fixtures

These small upgrades can make a big difference in the value of your home and they don’t cost that much. You can save the major upgrades to these spaces when you have money left over after your refinance.

4. Improve Curb Appeal

The appraiser does not spend a lot of time looking at the exterior of the home, other than checking that the roof is not falling in. But making a strong first impression when the appraiser pulls up will always help your case. It is a smart idea to have the grass cut and edged, and pulling any weeds out of flower beds and putting in new mulch will always help. And it’s cheap. Also, sweep up all the grass cuttings and debris off the street and sidewalk. A neat, trim appearance on the property’s front will help your case.

5. Remodel with Care

If you want to spend more money and remodel some of the rooms, that is fine. But you want to make sure that you do not overspend. Remember that your investment should be well in line with the value of the home. If your home is worth $150,000, putting $50,000 into the kitchen is not going to be worth it. You won’t get your money back in the appraisal or when you sell.

6. Keep the $500 Rule in Mind

Many appraisers value homes in increments of $500. This is very common so some people think that doing $100 repairs, for example, are not needed. That is not the case. Making those little repairs on those dings in the wall or cracks in the ceiling do make a good impression and they cost peanuts.

7. Additional Items

There are some appliances and fixtures that may add to the appraisal. If you have a luxury bathroom that has a hot tub, you should ensure that the fixtures are clean and work well before the appraisal. Also, air conditioners will be checked by the appraiser. So, change your filters and get rid of any debris around the unit.


There are some common misconceptions about appraisals that you should be aware of. First, remember that an appraisal is based not just on the condition of the home and its features, but also on the value and features of homes in your area. If you add features to your home that are unusual or excessive for your area, you could actually lower the value of the home.

For example, if you have the bedroom painted in unusual colors, or have a big fancy garden area in the back of a modest home, these could lower the value. Also, a pool can actually drop the value of the home in some cases because it is another maintenance item. Find out if a refinance with cash out makes sense for installing a swimming pool or spa,

Words of Wisdom

Doing a mortgage refinance loan to drop the interest rate on your home and lower your payment is usually a great idea. However, as we noted above, you have to make sure that the home will appraise for the proper amount so that you can refinance and, possibly, pull cash out. So, you can do some of the simple renovations above and they could add at least several thousand dollars to the home’s value. This will help your new loan to go through, and you will be able to probably sell the home for more down the road. The Refiguide can help you talk to a lender or broker about the current home refinancing opportunities.