Home Selling Tips

How to Not Get Short-Changed When Selling Your Home

lose money appraisalLow home appraisals have become common today. They are scaring off property buyers and sellers. And they can even drive them nuts. In case you will engage or deal with a residential property or home appraiser and want to prevent property depreciation, then follow the tips below.

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Appraisals

How Low Home Appraisals Affect Your Mortgage

Even if low home appraisals sound like a good thing to many buyers looking to buy a home, that is not always the case.

For the property seller, it can be a never-ending hell and something that they may not be really happy about.

Just imagine wanting to sell your home and putting it on the market for $100,000.

Once you get a buyer lined up, the lending company will then order an appraisal and have the appraiser come out, knock on your door, do their thing for about 30 minutes, and after three or seven days, you then get a notice that that your property only came in at $70,000 instead of the expected $100,000 that you were listing it for.

What happened to the remaining $30,000?

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Appraisals

What Is A Home Appraisal?

what is an appraisalBuying a house is not something that anybody should take lightly.

Even if you like the house and is willing to buy it at any cost, it is wise to check if you are actually paying the right amount to obtain it. Paying an extra $100,000 to a property that truly costs $100,000 is obviously something that you will not do, of course.

That is when home appraisals come in.

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Mortgage and Appraisal

Getting a Free Home Appraisal

Home appraisals are definitely essential to anybody who wants to refinance, sell, or buy a new home. However, hiring an appraiser is not a cheap thing to do and a lot of frustration can get in the way if you do not know where to start and what to look out for.

If you are looking to save money by refinancing, there will come a time that you will want to get an appraisal done to make sure that you can qualify in terms of your home’s property value.

Fortunately, it is possible to get your property appraised free of charge.

How?

Well, read the following.

First of all, gather all the information appraisers need. Appraising a property is not all about the size of its lot. Those appraisers need a lot of information. And for you to go through a good estimate of your house’s value, you will need to get every detail you can. Few of the important things you need to take note of are:

  • Your property’s lot size or acreage
  • The size or footage of your house
  • The type of your house. Is it a condominium, a regular single family house, or is it a townhouse?
  • Number of bedrooms
  • Number of bathrooms
  • Parking or garage area
  • Basement size and condition
  • Overall house condition

After jotting down all of those details, it is time for you to look for the appraiser. Actually, you will not be dealing with a live person to get a good appraisal or estimate of your house’s value. You will need to find an online home appraisal tool. To find them, you just need to key in “Online Home Appraisal” in your favorite search engine (preferably Google).

The search result will provide you with a list of sites that offer online appraisals. One of the best tools out there is from Chase. However, it works a bit different. With Chase’s home value estimator, you will be able to know the market value of your home. Technically, it will just ask you for the location of the house. The tool will provide you with estimates on the price of the houses around your area.

To get a better estimate, you will need to try out two or three different tools. The other tools will calculate the value of your property using the details you have took note. Check the differences between the results of the home appraisals you will get. Get its average, and you will get a rough estimate on how much you can sell your house or how much an appraiser can give you.

By the way, you should understand that the estimates you will get are incomplete. Remember that the value of your house and the market trends are not the sole factors that appraisers consider. The quality of living in your area can naturally pull your property’s value higher or lower. Accessibility to other places can also affect it. On the other hand, the value of similar properties, or comparables, can have a huge effect on the appraisal process.

Nevertheless, getting free home appraisals online is not a bad idea. The goal here is to provide you a clue of your property’s value. And that clue can help you decide when you will get a real appraisal or initiate a mortgage refinancing process.

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Mortgage and Appraisal

Mortgage Refinancing and Getting Better Home Appraisals

Aside from helping people know the right value of a property is, home appraisals can aid people who want to go through mortgage refinancing. Refinancing is a process wherein you borrow money to pay your previous loan. When it comes to mortgages, you will borrow money from the mortgage firm to clear the remaining debt you have with them.

One might think that is senseless to do. Why would you borrow to pay the money you borrowed? Well, it has its own merits and advantages. A few of them are:

  1. It will allow you to change the interest rate of the loan and extend the maturity date of the loan, which can reduce the amount that you pay monthly. If you have a loan of $100,000 with 20% interest that will mature in one year, you will need to pay the lender $120,000 or $10,000 a month. In case you already paid $70,000 and refinanced with a $50,000 with 20% that will mature in one year, you will need to pay $60,000, but you only need to pay $5,000 every month in one year.Technically, it lessens the monthly burden of the loan though you will need to pay an additional $10,000. However, in case you got a better interest rate, the additional cost will be lowered. For example, if you got a 10% interest rate instead of 20% for that refinancing, you will only need to shoulder $5,000 instead of $10,000.
  2. It can make debt management easier. Technically, refinancing gives you the power to eliminate other debts. Doing that is actually a good decision, especially if you are going to pay a high-risk debt, which might default, in full immediately. The possible additional cost of refinancing is easier to handle than going through the consequences of a debt default.
  3. Aside from those, it can also provide you with some spare cash. You are not limited to borrow the amount you loaned only. Actually, you can borrow more, depending on the lender that you will choose.

Those are just few of the advantages of refinancing. So, where do home appraisals come in? Well, if you plan to do mortgage refinancing, appraising your property should be your top priority. Remember that you will be using your house as the collateral. The value of your property determines the amount you can borrow. And the value of your property is determined by appraisers.

Because of that, for you to take on a better mortgage financing deal, you should make sure that the appraiser would provide the highest value he can commend. By the way, you should also know that in some states, mortgage refinancing could allow you to get a tax break. So, aside from the extra cash people get from refinancing with good home appraisals, they will gain deducting points.

As of now, mortgage interest rates are very low. And many financial experts advise residential home owners to take advantage of refinancing. However, if your house has a low appraisal value, it will be best to improve it first before making that mortgage loan.

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