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Appraisal News & Commentary
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If you happen to be shopping around for a mortgage, it is very important that you first take the necessary time to do your homework. When I say homework, I am talking about research. There are so many loan programs out there that it is easy to get lost in all of the mortgage jargon that people in the industry love to use on you. Not to mention of all of the paperwork. By the time you get to the table, you will have a mound of paperwork approximately six inches high filled with words and terms that most people in the business don’t even understand. The mortgage industry is filled with all kinds of pitfalls that you can find yourself sitting in. This is why taking your time and doing research is key to purchasing a home. Research can literally save you thousands of dollars in closing costs and interest charges. So don’t rush into it! For starters you will want to contact a realtor and a lender. When choosing a realtor, ask a family member or friends to refer one to you, one they know well and can be trusted. Or better yet, one they have used personally. There are many ways to choose a lender, but for starters, here are just a few ideas to get you started. The traditional way would be to walk into your neighborhood bank and speak with a loan officer. If you don’t like that idea, you might consider filling out an on-line application, and let the lenders choose you. Or you could contact a broker. A broker will evaluate your situation for you, and then shop around for a lender with the best program or rate, or both. Remember, just because you have a realtor and a loan officer doesn’t mean you should stop doing your research. At this point in the game, you should be doing even more research. This way you will have an understanding as to what your realtor and loan officer are talking about when they start speaking their language. You will also want to find out what your credit score is. Most likely your loan officer will do this for you. Your credit history plays a large role in the loan approval process, and it will also affect your interest rate. If you already know that your credit is a little bit challenged, than you might want to start out using a broker. Most brokers work with about two hundred lenders, so they would be your best bet as far as finding a bank that deals with challenged credit. When you are purchasing a home, you will hear things such as debt to income, appraisal, and loan to value. I’m sure you may have heard these terms in the past, but do you know what they mean, I mean, do you really know what they mean? Inside and out. I cannot stress enough the importance of doing research before buying a home. It is such a vital component when it comes to saving money. Use the internet, use the library, and most of all, use your realtor and loan officer. Ask them as many questions as you possibly can, learn from them, after all, you are paying them! Your home will most likely be the largest financial transaction you will ever make, so when you come to making your decision, make sure it is an educated one. Good luck! This article may be reproduced by anyone at any time, as long as the authors name and reference links are kept in tact and active. Jay Conners has more than fifteen years of experience in the banking and Mortgage Industry, He is the owner of http://www.jconners.com, a mortgage resource site, he is also the owner of http://www.callprospect.com, a mortgage lead company.
Judge Shuts Down Mortgagors as Brown Denounces Fly By Night Lenders. More Buspirone buy ahead as Heathrow’s Terminal struggles. In a time when tens of thousands of people are losing their homes to foreclosure, house prices are falling and the mortgage industry is being criticized for its part in the credit crisis, it’s not surprising that some disputes end up in court. After the Sutter County tax appeal board agreed to retroactively lower her property taxes, based on the idea that her initial appraisal had been inaccurate, Bolden hired her own lawyer. (more…)
It seems as if a lot of people don’t realize how much things have changed in the game of buying single family homes. Whether you are buying your own home or a home as an investment, everything is just about 180 degrees different. Over the next couple of days, I’ll discuss some of the changes. Today I want to talk a little bit about appraisals. We all know what an appraisal is or at least we think that we do. It’s defined by the profession as an opinion of value. That’s it, nothing more or less. As such it can be oral, written on the back of a napkin or encompass an entire book. Most of us are familiar with it from the home buying experience and are used to seeing it on the form proscribed by Fannie Mae. It’s used by buyers, sellers and lenders to come to some sort of agreement about what a particular property is worth but in the end it is just an opinion and quite often two different people will reach strikingly different conclusions. In just about every real estate crash, downturn, bust etc. the appraisers come in for a lot of blame. In my opinion they usually deserve less blame than is leveled at them but more than they are willing to admit. It’s been no different this time around and the point here isn’t to sort out who is at fault, rather it is to note the changes that have come out of the experience. There were without a doubt appraisers in Phoenix and elsewhere who were quite good at creating an opinion of value that amounted to whatever the buyer or seller needed. Most of those guys have either gotten religion, been scooped up and punished by the regulators or moved on to the next scam. Those that are left are pretty much doing things by the book. The lenders have taken it one step further and are generally having either their own appraisers or independent appraisers review the work of the first appraiser. Since a review appraiser has to justify his fee or salary, they aren’t likely to necessarily agree with the original appraiser’s opinion and it’s a pretty safe bet that in these times their number is going to be lower. So the bottom line is that any appraisal today is going to start out conservatively and then may be adjusted down. So what does this mean for the homebuyer? First, the seller has to have a pretty realistic idea of what their home is worth. If you don’t, the odds are that even if you reach a deal with a buyer it will fall apart in the mortgage decision process. Second, the days of playing games with undisclosed incentives to the buyer in order to get a higher price are over. Once again with the review process there are just too many eyes looking at the appraisal not to spot any shenanigans that might be going on. Finally, if you are even thinking about buying a house and flipping it be sure you have a cash buyer. There is simply no way that in today’s market to sell an underwriter on the notion that a house is worth one penny more than was paid for it a couple of months ago. As a rough rule figure that you have to hold it for at least a year and if you are trying to sell it for substantially more than you paid then you had better have rock solid SALES comps and be prepared for a battle. Remember that even trying to influence an appraiser’s opinion is a federal offense. Believe it or not, that means even suggesting a value that you would like them to come in with could land you in a lot of trouble. The reputable appraisers stood their ground during the past few years and refused to step over the line. Consequently, they lost business to the fly by nights. The reputable appraisers are what’s left and, they probably would resent me saying this, they do have a little bit of a chip on their shoulder. Don’t push your luck.
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