The Analytics on Appraisals

The Analytics on Appraisals

What is an Appraisal?

An appraisal is a document provided by an appraiser (the person who conducts the appraisal report) that provides a professional estimate of the value of your home.

Appraisals are conducted by a third-party appraiser who is completely objective in their process. Appraisers do not work in favor of the lender nor the borrower. They simply conduct the appraisal and produce their findings.

Appraisals are most often conducted two ways. The first way an appraiser can conduct an appraisal is by noting comparables. Comparables, or comps for short, are properties within the neighborhood of the home you’re buying that are similar to yours. The appraiser will use the values of the similar properties nearby to determine the value of your home. The second way is by estimating how much it would cost to replace your home should it burn down or be otherwise destroyed. The appraisal will compile all of the findings of the appraiser including:

Why Lenders Need Appraisals

Lenders do not want to dish out more than the actual market value of the subject property. An appraiser’s goal is to determine that value. With this figure, the lender knows how much the property will sell for if you default on your loan. They also know how much they can lend to you without taking a loss if you default.

For example: If the subject property is appraised at $150,000 – that’s how much it will sell for on the open market. If your lender gives you a loan of $175,000 and you default on your loan, they now have to try to sell the home at a higher amount than what its appraised for, which can be difficult. If they end up selling the home for the actual market value, they’ve just lost $25,000. It is for this reason that lenders usually give a loan amount that is at or under the appraised value.

Why Borrower’s Need Appraisals

Appraisals are usually buyer paid and can be paid for at closing or during the application process. If you’ve signed a contract to buy a new home for $200,000 and the appraisal comes back valuing the home at $150,000, you should negotiate with your lender to lower the loan amount because you’re paying more for the home than it’s actually worth.

Overall, appraisals are a measure of protection. They ensure that neither party is lending or spending too much during the purchase process of a home.

 

 

 

 

 

 

 

When doing your research, always be sure to cite great sources! Check out the sources for this article below!

 

http://www.bankrate.com/finance/real-estate/why-does-the-house-need-an-appraisal.aspx

https://www.thebalance.com/mortgage-101-series-understanding-the-appraisal-process-2395231

https://www.thebalance.com/facts-about-residential-real-estate-appraisals-1797691

https://www.thebalance.com/appraisal-process-when-buying-a-home-2395235

 

WHITNEY RUSH, VALLEY WEST MORTGAGE

 

 

When is the right time to finance a home?

The time to finance a home for the best rate could be now, as mortgage rates across the country have reached a low over the last 16 months at 4.12 percent, according to Freddie Mac.

This number is quoted for a 30-year fixed rate conventional mortgage, and since Jan. 1, people have been finding themselves able to afford about 8 percent more of a home in terms of quality. Las Vegas, in particular, may be experiencing their home rates flattening out as the median home price reached $200,000 in August, which is an almost 10 percent increase from the same time last year, according to a recent report from the Greater Las Vegas Association of Realtors (GLVAR). This is good news for home owners and buyers as the economy continues to recover from the recession that severely impacted the value of property nationwide.

Although property values increase as pricing begins to level, low mortgage rates are not necessarily available to everyone. Those who will see the lowest rates would be considered prime lenders, defined by Freddie Mac as a lender with a credit score over 740 and who can offer a 20 percent down payment. This, however, should not discourage those from financing a home.

If you’re interested in mortgage rates in the greater Las Vegas area, please contact Valley West Mortgage at 702-696-9900 or info@valleywestmortgage.com

Mortgage Rates Are on the Rise!

We said it would happen and soon. Average rates have just passed 5%

What we don't know is how far or how fast this Mortgage Rate rise will be. Recent positive indicators for the economy have caused rates to rise. Mortgage Rates parallel Long-Terms Bond Rates and those always rise on positive economic news. It is more important than ever to have your Refinance or Purchase file in the hands of a competent Mortgage Professional! At Valley West Mortgage, we keep a very close watch on rates for our clients. While rates are clearly on the rise, they still have their ups and downs. We watch all of the rate change indicators for potential changes so we can lock rates at the best possible advantage for our clients.

The key to being ready to lock is having a complete file which is ready in every respect. With our clients help, and help from our Realtors on Puchase files, we do everything within our control to make sure that your file is complete, as quickly as possible. In this way, we won't miss any opportunity to secure the best terms possible! Give us a call today so we can help you to succeed even in this unstable market. Remember, Las Vegas is still one of the best buying opportunities in the entire country regardless of current rate fluctuations.

Call (702) 696-9900 or (888) 931-0007 and let Valley West Mortgage get you ready to close!

It Really is Better to Buy than Rent in Las Vegas!

On the upside...

A study was published today by Trulia, a major Real Estate watch site, and Las Vegas is #2 behind only Miami as the best place to buy rather than rent. I'm sure that this will be on most of our Local News stations by this evening. They love to cover the latest Las Vegas Real Estate news.

As we have said before, this is the best opportunity in years to buy a home in Las Vegas! Currently, rates have been fluctuating quite a bit due to market uncertainty. For the past two weeks, rates have finished slightly highger. Don't wait for home prices to "drop a little more" and then find yourself out of position because rates have gone up too much.

Call our professional staff and get the ball rolling today! That way, you will already have provided everything needed in order for us to lock your rate as soon as you have an accepted offer on a property.

Call (702) 696-9900 or (888) 931-0007 and let Valley West Mortgage get you ready to close!

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FHA - Mortgage Insurance Premium Update...

Implementation of the new plan is delayed until October 1st.

After announcing last week that it was lowering upfront insurance premiums
from 2.25% to 1.0% on Sept. 7, the Federal Housing Administration said it’s pushing back implementation until October.
“Based on industry feedback and our desire to have this change implemented successfully in the marketplace, FHA will make the premium fee changes on all new case numbers effective October 4, 2010,” said Vicki Bott, Deputy Assistant Secretary for the Housing and Urban Development.

For details on the upcoming changes, see our earlier post, "Congress has passed H.R. 5981 – FHA Mortgage Insurance Changes…" Posted on August 5th, 2010

Congress has passed H.R. 5981 - FHA Mortgage Insurance Changes...

This bill gives FHA the authority to adjust its annual mortgage insurance premiums.

While there is both good news and bad news for FHA mortgage applicants, this premium restructuring will help to keep FHA stable in the long run. The up-front mortgage insurance has been lowered considerably. This will mean a smaller bite out of consumer wallets in order to close the loan they have applied for. With todays stricter underwriting to qualify, there is less risk of default by new mortgage holders so this move makes sense. Now for the trade-off...

On the other side of the equation, the cost of the monthly amount of mortgage insurance will increase. This could be interpreted as FHA reserves being replenished at a slower rate than before passage of this bill. With the more stable underwriting lowering the risks, consumers can save some of that money that was needed just to close their loan. You will still end up spending that money but, it will be as a slightly higher monthly payment amount. While this is a fair trade off for many, some folks who are right at the limit for the maximum monthly payment they can qualify for, will have to find a way to lower their loan amount to offset the impact of the higher monthly mortgage insurance premium. This change will be effective for all FHA loan applications started on or after September 7th, 2010. While President Obama has not officially signed the bill into law, no veto is expected.

House Extends Closing Date for Homebuyer Tax Credit!

Homebuyer Tax Credit Update Effective 6/30/2010 - Waiting for the Bill to be signed!

The U.S. House of Representatives has voted to extend the Home buyer Tax Credit.

The National Association of Realtors said that over 180,000 people would lose their Tax Credit if the extension didn't come through, now we have confirmation that the House of Representatives has extended this closing date to September 30th.

According to the National Association of Realtors what tipped the balance was the people who followed the rules and were still going to be caught without the Home Buyer Tax Credit due to the June 30th closing date. These transactions included some 75,000 short sales, or homes being purchased for less than the existing debt on them.

Dust off those April contracts that could not close by the June 30th deadline! All that remains for the Bill to extend the deadline for closing to September 30th, is one signature!

(from earlier post on 06/16/2010)

If you haven't been informed yet, the Homebuyer Tax Credit has almost ended with less than a month left for First Time Home Buyers and Current Homeowners to close their deals and qualify for the Tax Credit. While this opportunity was a great chance to get hefty Tax Credit from the government ($8,000 for First Time Home Buyers and $6,500 for Home Owners buying and moving into another home), it may be a problem for those who applied near the end of April and are still trying close their loans. Right now, those Tax Credits were set to expire for any loans that had not been closed and funded by June 30th of 2010. You had to have a signed Purchase Contract in place by April 30th. As a result, some Purchases are starting to fall apart because they are "In Contract" before April 30th but they are not able to close by the end of this month.

Many mortgage lenders have been experiencing hard times closing deals that suddenly appeared in April, and many Mortgage Brokers know "some deals just won't close before June 30th."

There is talk of Harry Reid possibly having a proposal which will allow those who have already signed sales contracts, to close and fund by September 30th as an amendment to a Bill already in Congress that would extend jobless benefits for the unemployed through the end of November.

The National Association of Realtors has been pushing very hard for an extension out of an awareness of the difficulty Mortgage Brokers are having with the current deadline of June 30th. Since the entire process of getting a Mortgage now takes a bit longer than it used to, Mortgage and Real Estate Professionals view an extension of the Tax Credit Program as essential.

First-time buyers are eligible for a tax credit of up to $8,000. Current Homeowners who bought and moved into another home can qualify for a credit of up to $6,500.

Interest Rates

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