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- Want
a Mortgage?
-
- If you want a mortgage
loan the lender wants your home as
- collateral. The
task of the appraiser is to estimate the market
- value of your home
so that the lender can decide if it provides
- sufficient equity.
-
- Getting a mortgage
requires the work and cooperation
- of a fairly large
number of people. From my experience,
- one of the least
appreciated groups of people involved in
- the process is
appraisers.top
-
- What
are Appraisers?
-
- Appraisers are
licensed by the states. They take classes and
- have to pass a
test. They present their credentials to lenders
- and strive to be
on the list of approved appraisers that many
- lenders have. This
makes their appraisals more "portable" -
- a valuable asset
to a mortgage broker who wants to take the loan
- to the lender with
the best rate.
-
- Appraisers are
divisible into several sets. There are commercial
- appraisers - they
appraise large commercial properties such as
- office buildings,
shopping centers, mobile home parks and
- other sorts of
commercial properties. The appraisers that we are
- concerned with
are those who do residential properties. These
- are 1-4 family
homes.
-
- Some appraisers
work for lending institutions. Others work for
- themselves and
serve the lending community in general and
- are usually called
"fee appraisals" as they charge a fee for each
- appraisal..top
-
- Getting
a Loan.
-
- Work between the
loan officer and an appraiser may begin soon after
- the borrower contacts
the loan officer seeking a loan. If the
- transaction is
a purchase, the buyer is helping to set the market
- and, in general,
the appraisal will come in at almost exactly the
- purchase price.
Exceptions may occur if the buyer is paying much
- more or much less
than other comparable sales would indicate.
- If the transaction
is a refinance, the loan officer will usually
- seek an appraisers
estimate as to whether the property is
- worth enough to
support the loan.
-
- Appraisers start
with the specifics of the property: location,
- lot size, size
of the gross living area, number of bedrooms, size
- of the garage and
any amenities. Generally, the appraiser has
- access to an online
data base or perhaps CD ROM's with data on
- recent sales in
the area. The more recent sales there are of
- similar properties
in area of the subject property, the easier the
- task. Homes in
newer subdivisions, having identical plans are
- easier to appraise
than, say, homes of the block where I live in
- San Francisco where
no 2 houses are the same..top
-
-
- What
the Appraiser Does
-
- Only a small portion
of the work an appraiser does on a given
- appraisal is the
inspection itself. When an appraiser schedules
- an inspection he
will look in his data base and try to find,
- perhaps, 6 comparable
sales. He will then come to your home,
- ring your doorbell,
ask for a check, and then measure the size
- of the rooms and
make a sketch. This is what solicits the
- gripe I often hear
from borrowers: "Hey, this guy was here for
- less than 10 minutes
and charged me $300 - what a rip off". This
- is unfair. At the
point where he leave your home the appraiser's
- job is still in
the early phase. He then photographs the
- outside of your
home, a street scene, any views that may
- support his allegation
that the house has "a view" and they
- drives around and
photographs the other 6 potential comparables.
- At this point his
thinking may change according as the perception
- that he formed
in his office is tempered by reality. In this
- case, he may need
a come up with a new set of comparables..top
-
- Some
Pointers
-
- The perception
that borrowers have about the value of their home often
- comes from mailings
that they receive from Realtors in the area.
- Realtors send information
about recent comparable sales with the
- intention of letting
people know how valuable their homes are.
- This is often biased
toward the upside. Realtors are more
- likely to tell
you about the homes that sold at higher prices then they
- are about the ones
that sold at lower prices. From my experience, this
- gives borrowers
a slightly higher than realistic estimate of the value
- of their property.
-
- If you are doing
a loan with a mortgage broker you are better served
- to let the broker
pick an appraiser who is familiar with the area and
- is on the list
of approved appraisers of the lender or lenders to whom
- the broker may
be taking your loan..top
-
- Locking in your Low Rate:
-
- What exactly is a lock and how do they
work? When you apply for a mortgage, you're doing just that,
applying for a loan. If you are want to lock-in a rate,
consider the following:
-
- 1. Locks cover a specific time period,
tell your lender how many days you you'll need. Each additional
30 days will cost you another 1/4 point.
2. Some lenders charge a lock-in fee,
some don't. Some ask for an application fee or other charge
before allowing you to lock.
-
3. If you locked exactly 30 days ago and
are closing on your loan the same day the rate expires,
you need to make sure your lock won't expire before the
loan is fully documented.
-
4. If rates have gone higher, ask for
a lock extension before the rate expires. Many times you
can extend your lock for a fee. .top
-
-
- Help
Yourself
-
- If you are contemplating
refinancing, obtain and retain all the
- information that
you can on recent sales of homes in the area. You
- may know of a sale
that just took place that is not in the database
- available to the
appraiser. I have had cases where we have done a
- preliminary estimate,
found that it was low and then had the borrower
- note a sale that
was at a price that made the appraisal work. From
- a practical point
of view, you - as the person in the neighborhood -
- are best able to
track this. If you have any relationship with a
- Realtor in the
area, they can do this also.
-
- Some information
is available for free on the WWW. The site
- http://realestate.yahoo.com/realestate/homevalues
will tell
- you sale prices
in a given range of addresses. It does not know
- what's "around
the corner" but, by playing with it, you can find
- the value of some
properties that sold recently in your neighborhood..top
-
Author: Dick Lepre
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