Month: March 2023

An appraisal is the best way to determine the value of a property. It is an especially valuable tool when it is applied to mortgage lending. A property appraisal indicates to a lender how much you can borrow when purchasing or refinancing a home.

Lenders want to make sure that borrowers are not borrowing too much because the property serves as collateral for the loan. The appraisal keeps you from borrowing more than you need and the lender from lending you too much money.

With a home purchase, if the appraised value comes in lower than the agreed-upon sales price, the lender will still lend you money based on the stated loan-to-value (LTV) ratio. The loan amount will be adjusted downwards to reflect the actual value of the property.

A low appraisal can serve as a negotiating tool. Any value difference from the contract sales price will have to be paid in cash by the borrower, or the deal can be canceled if the seller is not willing to change the selling price. If the appraisal reflects a value higher than the contract price, the mortgage amount does not change.

When trying to do a refinance for a conventional loan, your home will usually have to be appraised at or above the amount you want to refinance in order to get loan approval. The lender will want to see if the appraised value indicates that your equity is at 20% or higher.

For homeowners with an existing FHA loan who may owe more than their home is worth, an FHA streamline refinance can be done with no appraisal required. Since not all refinances will require an appraisal, check with your lender to see how your loan situation is affected.

Please contact me for help on navigating through the impact of an appraisal and its potential effect on your home purchase or refinance.

Once you become a homeowner, you can no longer rely on a landlord to take care of maintenance issues that may arise where you live. Since the responsibility now rests with you, it would be wise to try to stay a step ahead of tasks associated with maintaining your home’s condition and value.

To organize and oversee the needs of your home, creating a homeowner’s journal will be your best ally to keep track of warranties and manuals for the systems and appliances in your home. Arrange to have a notebook, binder or file drawer as your home base for collected receipts and manuals.

There are several things to collect that will increase the efficiency of managing your home. Ownership information, such as the title to the property, appraisals, inspection reports, home warranty plans, homeowner’s insurance and mortgage documents, should all have a place in your journal. Include the dates and contact info for the maintenance and renovation professionals who have performed various tasks around your home. List renovation and purchase dates along with descriptions and samples of finalized work.

If you organize your journal by season or category, you can easily produce a schedule of maintenance tasks. Record projected end-of-useful-life dates for major appliances and components.

Home ownership will run smoothly with fewer maintenance surprises with a working journal. Having a journal also helps assure a future buyer that you have taken good care of your home. It will also be very useful if you consider refinancing your home.