If a home’s value increases by what percentage or more within 6 months is a second appraisal required?

A second appraisal is required if a home’s value increases by 10% or more within a 6-month period. This threshold is set to ensure that any significant changes in the property's market value are accurately reflected, helping lenders make well-informed decisions regarding the financing of the property.

When a home's value appreciates considerably within a short timeframe, it could indicate fluctuations in the housing market that might affect the collateral value of the loan. Thus, the requirement for a second appraisal serves as a safeguard for lenders against overestimating the property's worth and subsequently facing losses.

The other percentages, such as 20%, 5%, and 3%, do not trigger this mandatory second appraisal requirement according to federal guidelines, as they fall below the 10% threshold that has been established for such scenarios.