Avoiding A Low Home Appraisal
Your appraisal may be the first and most important steps in your mortgage refinancing. Getting a low appraisal may cause you to cancel any refinancing plans. There are some steps that you can do to avoid getting a low appraisal now at 2015.
Today’s mortgage market rates are such that most people are thinking to take advantage of the low rates and refinance their mortgage. Getting a low appraisal offer may cause many of them to be eligible for lower sum to borrow and ruin their refinancing plans. This was part of what the Home Value Code of Conduct (HVCC) is trying to avoid down at 2009.
Unfortunately too many people don’t realize how the value of their homes may have changed. They may have bought the house two three years ago, or even refinanced once, but when they think of refinancing their current mortgage, most of them have no clue how much the house is currently worth.
Appraisal Is Important For Refinancing
If you would switch places with your lender, and would need to evaluate the risk involved with the refinancing of the mortgage, what would the first thing you would check? Of coarse – How much the property is worth today! The lender requests an appraisal check to evaluate how much your home is worth. Once the appraisal is done this helps the lender set the maximum amount you will be able to get against your home.
It is recommended you use these tips here as they may have a good chance to help you avoid a low appraisal.
Refinance Appraisers Use “Comps”
Appraisers have a tool they use which is comparing (comps) home value in several parameters and evaluating them compared to other houses sold in the local area around you six month back. Appraisers are required to locate three comparable sales within one mile that closed within the last six months. Those figures will be added to their appraisal valuation.
So what influences your appraisal estimation is what the real estate markets have done around you in the last six month.
- Appraisal Tip 1 – Do your own research of real estate deals done around your neighborhood. The best advice is to turn to local real estate agents as they know exactly what is going on and which homes where sold and what was the closing price.
- Appraisal Tip 2– Do a research on those deals which you have found, you may go and speak with the new home-buyers, a house price (low or high) can be explained in many ways. think that a house was sold for 100K lower than your estimation, but a quick check reveals it was bought for fix up.
- Appraisal Tip 3 – Keep record of all your findings, give all the information to the appraisal that shows up. Those figures you find can have an impact on your appraisal, and help the appraisers evaluation be closer to reality (or higher).
- Appraisal Tip 4– If you can afford it, try to work with local appraisers. A person who’s business is in your local area is sure to know and have deeper insights of the neighborhood, this means they can leverage their knowledge when they research comps.
There are some factors you have no influence of, such as foreclosures in your area; they will drive down the value of your home.
D.I.Y For Higher Appraisal
This is something which is so simple yet too many overlook this issue and fail to get a higher appraisal before refinancing. The appraiser is a person, and people evaluate real estate with their eyes. You do not have to be a construction person to understand that evaluating a place which is broken down, the mail boxes are rusty and outdated, no light or garden care is seen outside… all those will lower the appraisal evaluation of your home.
Here is a list of ideas you can renovate to add some more value to your home before the appraisal. Make sure to do them well before you start the mortgage refinancing process, as appraisers know to spot when renovations are made for their eyes only, and may discharge of them. Renovation for appraisal is fine, just try not to over do it.
- Add flowers and plants to the front garden.
- Fix your and other mail boxes.
- Add lights to the house – outside and inside – well lit houses seem larger.
- Re-coat your driveway.
- Renovate bathroom – think of hotel rooms..
- Add a porch, deck, or wooden floors.
- Update your kitchen – counter-tops and appliances.
- Put on a fresh coat of paint.
The appraiser will investigate on structural damages, if those are found it might drive your home value down and risk your chance for any popular government-backed FHA loans. So you should take care of those in the first place. Don’t over estimate the renovation effect unless you invest in adding a room or doing a real fix up to the property.
You can avoid low appraisal at 2015, if you plan some of your refinancing moves ahead.