Top 5 Reasons You Should Go For A Home Appraisal
Whether you’re a buyer or a seller, getting a home appraisal can be a trying experience for both. Often people confuse home appraisals with home inspections. The latter is just a small part of the story. Appraisals, on the other hand, evaluate not just the interior of your property but other comparable properties, school zones, and crime rates as well.
1- What Home Appraisal Mean For A Buyer
As a buyer, appraisals will help you out in your mortgage process. The lender decides to loan out the money on the basis of your appraisal results. Suppose your house appraisal value is equal to or greater than the amount you want to borrow, congrats. You’ll get that home. However, if the appraisal value is less than the amount demanded, you will probably not get that mortgage.
2- What Home Appraisal Mean For A Seller
As a seller, you may carry out a home appraisal if you’re looking to find out the financial value of your house on the market. If your house has a lower appraisal value, it will sell for less on the market. Similarly, if it has a higher appraisal value, it will sell for a higher value on the market.
We have mentioned the major reasons why you should go for appraisals as a buyer and seller. We have further compiled a list of five other reasons you should opt for home appraisals.
3- When You Refinance Your Home For Home Appraisal
You can get an appraisal of your house when you refinance it. Refinancing means replacing the prior mortgage with a newer one. The financial value of a house usually increases from when you initially purchased it.
When you apply for a refinance on your mortgage, lenders will want to evaluate the financial value of your house. They do so to ensure that the current value of the home is aligned with the new mortgage loan. If the value of your house has improved since you bought it, you can take cash out as part of the refinancing process. If it has dropped, you will have problems obtaining a new loan.
4- Before You Sell Your Home
If you’re planning to put your house on sale, consider doing a pre-listing appraisal. Pre-listing and appraisal will allow you to have a better idea of your house’s worth in the market. It will save you from overstating or understating the price, which can waste your time when selling. Home appraisals will help you set a realistic asking price that will fasten up the selling process.
5- For Tax Assessments
Most states calculate property taxes on the basis of the fair market value (FVM) of your house. FMV refers to the price at which an item would sell on the open market. The price at which an object would sell on the open market is referred to as FMV. Under the following set of circumstances, fair market value will have to represent the price of a property: Potential buyers and sellers have a good understanding of the asset. They’re only looking out for themselves. There is no undue pressure on either party to trade. They have an acceptable amount of time to finish the deal.
If the value of your property is high, expect higher property taxes. However, you can apply for an appeal of the assessment. You can make your case stronger by having an independent appraisal. Just make sure your state allows carrying out independent appraisals to appeal tax assessments.
6- For A Home Equity Loan
When it is difficult to keep up with monthly mortgage payments, people opt for home equity loans. Don’t confuse it with refinancing. Refinancing is replacing the previous loan with a newer one. In contrast, home equity loans act as a second loan on your existing mortgage.
Once you get a home appraisal, the value of it will decide how much of a home equity loan you can get. The current value of your home will be subtracted from the remaining amount of available equity. The resulting value is the loan you can borrow.
7- For Other Loans
You may be required to use your home as collateral for other types of loans, such as cash and business loans. The bank will want to make sure that the money it provides is backed up by the current worth of your home.
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