If you are in the market for a mortgage, studying the basics will help you avoid manufacture common mistakes that can cost you thousands of dollars. Here is what you need to know about appraisals and your mortgage.
Your home's evaluation is an evaluation of the home's value ready by a licensed appraiser. The appraised value of the home is based on up-to-date sales in your neighborhood and the sale of similar homes in your area. The appraiser will also evaluate the physical condition of your home by considering the home inside and out.
The mortgage lender will use this appraised value to rule your loan-to-value ratio. The loan-to-value ratio of your home is naturally a comparison of the value of your home to the amount of mortgage loan you are requesting. Most lenders prefer loan-to-value ratios less than 80 percent. To speculate your loan-to-value ratio naturally divide the amount of the mortgage loan you are requesting by the appraised value of your home and multiply by 100.
Before you have your home appraised you might want to ask for recommendations for appraisers in your area. Your Realtor should be able to recommend a good appraiser or you can experience the licensing branch of your State government for a list of licensed appraisers in your area. To learn more about recovery money on your mortgage loan, register for a free mortgage guidebook using the links below.
Mortgage Loan 101: Your estimation