Appraisals are used by lenders, when a home is sold or refinanced, to ensure that the buyer isn’t spending too much and the lender isn’t loaning too much. Countless appraisals are used for such transactions, but there are a number of other times when the services of an unbiased real estate professional might be useful.
Private Mortgage Insurance (PMI) is the insurance that lenders frequently require when the loan is for more than 80% of the home’s value. This additional payment is typically included with the monthly mortgage payment and may be quickly forgotten. When the loan-to-value ratio drops to 80% or less, due to appreciation or principal pay down, this insurance is no longer required, but the lender is unlikely to notify the borrower. Many people continue to make unneccessary payments years after reaching the required ratio.
A new appraisal can provide the required evidence that the required loan-to-value ratio has been reached, allowing the homeowner to have the mortgage insurance removed. The cost of the appraisal can frequently be more than recovered within months.
Estate Planning, Liquidation or Divorce
The loss of a relative or divorce is a difficult and traumatic time. Unfortunately, at this time, difficult decisions have to be made regarding the disposition of an estate. One of the first things that have to be done, in order to fairly settle affairs, is to arrive at an accurate value for the estate. An appraiser can help to place a value on the real estate, usually the most significant part of the estate.
Before selling a home, several decisions have to be made. The most important of which is what the home is worth. There may be other questions too, including what improvements should be made to enhance the value or to reduce the market time? Would certain changes be cost-effective? What is the best time to market the house? An appraiser can help to arrive at a market value, potential asking price and can make suggestions regarding potential changes.
There are many other potential uses for an appraisal, including employee relocation, establishing a net worth, tax planning, etc. Feel free to call us and discuss your potential appraisal needs.