Home values, over the past few years, have continued to decline as we face a lengthy housing recovery. This can be especially true if a home was purchased prior to 2008.
First, let’s look at some of the current lending guidelines in place and how they are impacted by the appraised value of your home. If the loan-to-value (the loan amount against the value of the home) exceeds 80%, Private Mortgage Insurance may be required, which is an additional monthly payment that protects the lender in the case of default when you have less than 20% equity in your home. Private Mortgage Insurance is automatically cancelled at 78% loan-to-value (22% equity), and can sometimes be removed 80% loan-to-value (20% equity).
Even more daunting, if the loan-to-value exceeds 96.5% (FHA) or 95% (conventional), we may not be able to qualify a borrower for one of our loan programs. This is why it is important, as an informed borrower, to not only find the right lender to work with, but to do some homework as well.
How do you avoid starting the refinance process only to find out you will pay mortgage insurance or you don't qualify at all? Try using the different tools outlined below to obtain an estimate of your home value. Here are some suggestions:
1. Zillow.com - http://www.zillow.com
2. Yahoo! Real Estate Home Values - http://realestate.yahoo.com/Homevalues
3. Contact a local real estate agent to find comparable home sale values.
4. Contact Mortgage Capital Associates, and we can use some tools and appraiser resources available to us.
Good luck!
No comments:
Post a Comment