Business Opps ::
Alternatives to Mortgage Appraisals|
Contrary to what your lender may want you to believe, appraisals are
not necessarily required.
As stated by Mortgage Insurance Companies of America (MICA) the Private
Mortgage Insurance Association . . .
"your lender must be satisfied that the property value
has not declined".
There are a myriad of ways you can prove to your lender that not only
has your property not gone down in value but has appreciated considerably.
- Your Home Value
Understanding what your house is worth can
help you remove PMI.
- What Makes Property Values
When you bought your house, you
bought it for it's inherent value. Inherent value is what attracted you
to your new home, ie. architecture; quality of construction; square
feet; landscaping; etc. But property value, or market value, depends on
many other factors.
- Direct Factors
Efficient utilities, adequate resources and
a thriving business district usually translates into healthy property
- Improvement (Sweat) Equity
Before and after pictures with
receipts work well.
- Appreciation Equity
Current tax appraisals are your best
bet, however, sales of comparable homes in your area may be
Low crime rates, attractive well kept and
well-located areas usually appreciate steadily in market value.
Proximity of good schools raise value of real
Close proximity of parks; bike paths; libraries;
shopping centers; hospitals; fire; police; convenience stores enhance
Whether it's public transportation, near an
exit to a freeway, or close to a thoroughfare or boulevard can be a
- Indirect Factors
A rising economy lifts most real estate
prices and boosts sales.
- Demographic Changes
As more new jobs in the area open up,
demand for housing subsequently follows suit - driving up prices.
- Comparable Sales Prices
The most reliable indicators of
current market value are pending and closed sales (within 6 months) of
properties similar to yours.
Bear in mind that comparisons are based on
local sales and prices at one point in time and may not reflect other
issues affecting your equity.
- Market Conditions
Find out how long recently sold
comparable properties were on the market before they sold. The shorter
the time frame, higher is the perceived value.
- Square Footage
Use square footage to compare your price
against comparable listings and recent sales. For example: if you have
2000 sq. ft. and you estimate your property value at $200,000 - that is
$100 / sq. ft. How much per square foot have nearby properties sold for?
The size and location of your lot may play a vital
role in pricing your property. A corner view lot goes for more than a
middle of the block lot.
An extra bath, deck, hot tub, RV/boat parking,
separate entrance, and extra storage will drive the value up as well.
- Low Interest Rates
Low interest rates drive demand, which
pushes up prices and equity.
Large influx of buyers (baby boomers) causing
demand on housing can force prices up at a rate higher then inflation.
Where can I go to find out what the appreciation
Answer: U.S. Department of Commerce tracks home sales
and construction. The National Association of Realtors monitors home
resale prices. Ask your librarian for information that suits your needs
"It takes a phone
call, a letter, and sometimes, but not always, an
Scott Veitch of F&M Bank (Tulsa Times
"If the lender
balks (about getting an appraisal) you may want to suggest
that you will refinance with another company if they are not willing to
Andrew Jacob, Pres. World Wide Financial
(Money Magazine 10/1998)
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