Everyone in America wants to own a home. This is quintessentially the American Dream. Every year, millions of Americans consider buying, selling or refinancing a home or investment property. Every real estate transaction include a requirement by a financial institution for a current appraised value of the property. Every year, countless people in the United States buy, sell or refinance their own slice of the American Dream. Most, if not all, of these transactions include a simple line item for an appraisal. Appraisals are one of the most common parts of real estate transaction. Let’s look in more depth under what circumstance, exactly, are home appraisals necessary.
Buying a home
If you are buying a property, you must know how much the property is worth before making an offer. It is also critical for your financial institution for which you are pre-approved. You cannot exceed the purchase price plus property taxes and HOA if any. These are all included in what you can afford. A professional appraisal report provides you with all the information you and your bank need to complete a real estate transaction in the most informed way possible.
Refinancing a home
Often, a refinance can be a great opportunity to take money out of your home. It can also be an opportunity to lock in a better interest rate or get out of a loan with a variable interest rate. Whatever the reason, a refinance is a great time to get an appraisal done and is usually required by lenders.
Home Equity Line of Credit (HELOC)
If you have ever considered buying anything and/or remodeling your property, you can apply for and be approved for a home equity line of credit. It is a great financial tool for any homeowner that has equity in their property. It does not need to be spent. It costs nothing in interest until you use it. A HELOC is also ideal for contingencies and/or emergencies.
Home Equity Loan
A home equity loan is very similar to a HELOC but the money is yours right away and you must make payments. Therefore, you are accumulating interest. The home equity loan is great for planned home upgrades that may add value to your home, such as remodeling a kitchen and/or bathroom.
Eliminate Private Mortgage Insurance (PMI)
PMI is insurance that lenders require home buyers to purchase, IF your mortgage exceeds 80% loan to value (LTV). PMI becomes unnecessary as you pay down your mortgage and/or as the value of your home increases. Congress passed a law in 1998 (the Homeowners Protection Act of 1998) that requires lenders to remove PMI when the LTV drops below 80%.
As a matter of fact, Appraisals Only offers a very specific service for homeowners to help get PMI removed from their mortgages. If you believe that you meet the 80% LTV requirement, call us! For a nominal fee, Appraisals Only can provide you with a statement regarding your home’s current value. The cost of this service will pay for itself in no time at all!
Settling a divorce
Getting divorced can be very complicated and stressful for both spouses. How any/all property is divided is particularly troublesome. In cases that end up in mediation or court, the judge may decide to offer one party a buyout or force a sale. It is highly recommended that nothing is decided until the appraisal is finished so the true market value of the home can be assessed. It is a great idea in either a sale or a buyout. Appraisals Only can work with all parties involved and in a productive, discreet and professional manner to make sure the best result is achieved for everyone.
Settling an estate
Losing a loved one is even more stressful than divorce. Settling an estate from a death or a probate, requires an appraisal. At Appraisals Only, we pride ourselves on how we handle these cases. We work with all interested parties to review any/all properties to come up with an accurate value so everyone can walk away knowing that all fairness was reached.
Real estate investors need to understand many variables before buying an investment property. In order to fully understand all the risks associated with a specific property, investors can order an appraisal. This will highlight all the issues a property has so the investors can make an informed decision before buying real estate investments.
Selling a home
You should always get an appraisal before selling your home. This will help you set a sale price. Unlike a real estate agent, Appraisals Only has no vested interest in your home’s value. We can provide you with honest and accurate information that helps you make the most informed decision possible, regardless if you work with a real estate agent or decide to sell your property For Sale By Owner (FSBO).