Declining property values are preventing some homeowners from taking advantage of today’s historically low interest rates and refinancing.
- Many homeowners nationwide have either no equity or are in a negative equity position in their homes. This leaves them with two options for refinancing, paying extra at the closing or what’s known as a cash-in mortgage. If you are in this situation, the first place I would go is to Fannie Mae’s or Freddie Mac’s home loan look up sites to see if either of these federal agencies which purchase home loan from many of the lenders who do them. Just fill in the info requested and both sites instantaneously will tell you yes or no. If you are fortunate and either does own your loan then there is a little known loan program which will allow you to re-finance your mortgage up to 125% of the appraised value. Another big benefit is this is a minimal documented loan, I believe you just need the appraisal, a loan application and credit report. You should contact your local mortgage broker for the full details.
- Those considering refinancing will need to determine the current valuation, comparing it with the mortgage balance. If the balance is at least 15 to 20 percent higher than what is owed, a refinance without a second down payment is possible.
- To obtain a good valuation, some homeowners hire an appraiser, at a cost of $300 to $600, or more on a large or expensive property. While this may be informative, most lenders require an official appraisal anyway, and that will have to be conducted by someone on the lender’s approved list.
- Another, less costly, option a homeowner can use prior to approaching a lender, is to check the comparable sales in the neighborhood and see which homes and for what amounts homes have sold in the last three to six months. In Napa County the Assessor’s office is located at 1127 First Street Room 128, Napa and their toll free number is 899.279.2118.
- Homeowners also can go to the county assessor’s office and look up specific homes that have sold recently in the neighborhood.
- When looking at comps, homeowners should consider homes with similar amenities and square footage as the property in question.
- Just before the home is scheduled for its official appraisal, homeowners should spend a few hours touching up and making sure it looks well maintained. Hiring a cleaning crew, repairing any broken windows, and providing documentation on upgrades also can help the appraiser.
If you live close to me, I would be happy to do a broker opinion of value for you for free. Just give me a call.
Reprinted from C. A. R. Market Matters
Thank you for reading this post. If I can ever be of help in finding you the perfect property here in the Napa Valley, please email me at Curtis@NapaValleyAddress.com.
Your Broker Extraordinaire, selling Napa Valley Real Estate from its heart, Yountville.
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