Home Values

A key component to refinancing your existing mortgage is your home’s value.  The new mortgage terms will be based at least in part on how much you are borrowing based on the appraised value of your home.  This lingo is referred to as your Loan to Value or LTV in the lending universe.

Some clients that qualify for a refinance that fits their needs are not able to move forward due to the value of their home not meeting the loan requirements.  With the problems in the housing market over the last several years many home values have dropped, and so many clients have a hard time knowing what their house is truly worth.  The market value of your home is going to be determined in the loan process by a local appraiser who checks the local market place for homes that have recently sold in your area that are close in age, size, characteristics, etc to your home.  Appraisers typically charge anywhere between $300 to $475.   However, don’t let this keep you from inquiring about a refinance.

There are a couple simple ways to get a great idea of what your home’s current value should be before you have to pay for an appraisal.

Here are three options that are completely FREE.

  1. Contact the Realtor that sold you the house

    Generally, Realtors will be one of the best resources for determining your home’s value if you were to put it on the market today.  If the Realtor that sold the house is no longer in the business or you did not use a Realtor to purchase, we recommend selecting one that has a long tenure in the business in your area.  Most Realtors will provide you with information at no charge as they understand this is good for long term business.

  2. Go to www.Zillow.com

    This website tracks all sorts of Real Estate Data.  It will help you determine what other homes in your neighborhood have sold for and what yours might be worth.  There are tons of tools on the site that are very useful.

  3. Check your local courthouse

    Look-up sales in your area for the past 6 months (or 12 months if you live in a more rural area).  This will give you a good idea of what the market has been over the past few months in your neighborhood (within a 1 mile, unless rural then go to 5 miles).  This does require some legwork on your end but many clients are saving $4,000 a year when refinancing to lower rates so a few hours at the courthouse may be well worth it!