A requirement for most refinances, a property appraisal indicates how much your home is worth, which gives lenders the information they need to determine your interest rate. If the amount of your proposed refinance loan is less than 80 percent of the home's value, then the lender can offer you the best interest rate. This can save you thousands of dollars over the life of the loan and help you reduce debt.
Make debt reduction possible with a favorable appraisal
Factors used to determine the value of your home include the price of similar residences sold in your neighborhood recently and your house's various features. While you can't change surrounding real estate sales, you can make sure the appraiser sees your home in the best possible light.
Tips for obtaining the best appraisal possible
- Clean up. Appraisers don't technically take into consideration how good a housekeeper you are, but they are human. A messy house sends a negative message while a clean, orderly house and yard gives a positive impression.
- Make repairs. Before the appraisal, take care of issues that could potentially affect your home's integrity like leaky faucets and pipes, cracked windows, peeling paint and dry rot.
- Point out improvements. In addition to comparing your house to recently sold residences of similar square footage, appraisers include in your home's value any upgrades you've added that increase property's worth, such as decking, flooring, cabinets and countertops, sinks, bathtubs and showers, exterior doors, siding and roofing.
- Mention neighborhood enhancements. Let the appraiser know about any recent improvements to the neighborhood, such as, the addition of amenities like parks, shopping centers and schools.
- Steer clear. Let the appraiser do his or her job without interruption from you. Avoid following the person around and keep children and pets out of the way.
An appraisal is an important part of the refinancing procedure. Ensuring that the process goes as smoothly as possible gives you a better chance of obtaining a favorable refinance loan that can help with debt reduction.
About the Author:
Julie Bawden-Davis is a Southern-California-based writer specializing in personal finance and insurance. Since 1983, her work has appeared in a wide variety of publications, including Family Circle, Ladies' Home Journal, Parenting, Entrepreneur and The Los Angeles Times.
DIY debt consolidation: 3 secrets for success
You're sinking fast in credit card debt, and there's not a life preserver in sight. Loans and balance transfer offers involve applying for more credit. Follow these tips for rescuing yourself from the dangers of excess debt.
Reducing debt or building savings?Even if you are following a debt reduction plan, it is important to try and build emergency savings.
When debt help is not enough: 3 reasons for filing bankruptcySituations can arise that make paying your bills impossible, or that render you ineligible for participating in debt relief efforts such as credit counseling. When you're enduring any of these circumstances, consulting a bankruptcy attorney can provide information about your rights and the consequences of filing bankruptcy.
Personal spending rises as income slipsPersonal income declined in August, but personal consumption expenditures rose, according to the Bureau of Economic Analysis.
3 reasons for consolidating credit card debtAre you paying more than one credit card bill each month? Have you overlooked a bill and incurred penalty interest rates or late charges? Consider credit card debt consolidation for simplifying debt management chores.
Guide to No Cosigner Student Loans
Are you a would-be student who would like to attend college, graduate school, or professional school, but are hesitant because you…
The advantages of using your local credit union to refinance your mortgageLocal credit unions increasingly are popular alternatives to traditional banks. While banks are privately owned,…
Debt Consolidation for Senior CitizensFew people have more financial choices, yet more opportunities to be overwhelmed by those choices, than senior citizens. Seniors…
What is the Best Loan and Debt Repayment Program?Incurring debt sometimes is necessary in order to meet one’s financial and personal goals, or to make payments for necessary…
Bad Credit Student Loans for High Risk StudentsCollege costs nowadays are through the roof and are only expected to rise in the future. Most students and/or their parents…