Online financial adviser NerdWallet.com reveals that almost 73% of Americans believe that knowing how much their home is worth lets them know where they stand financially. They know how much they can afford, find out if their home listing is priced right, and determine the price of their own home.
Refinances, home equity lines of credit, insurance premiums, and annual property taxes hinge on home value, as well.
This is why when it comes to real estate investment, it’s always a good idea to have a home evaluation. That way, you’re better equipped to buy, sell, refinance, tap your home equity, and even lower property taxes.
This list is a guide on determining home value:
Check if home insurance still covers the property’s actual value
A home’s value is bound to appreciate several years after it was first purchased. Thus, reviewing one’s insurance policy is a must. In doing so, you avoid the potential problem of not being compensated enough during unforeseen circumstances as the policy could no longer cover the full value of your home.
Always save receipts of home purchases, like a new appliance or equipment. Cash value or replacement costs of a damaged or lost household item should also be considered to renegotiate home insurance and come up with its most current value.
Try to get private mortgage insurance out of the way
Many lenders require a PMI for those who pay less than the usual 20% of the down payment on their home. As a result, homeowners should make monthly mortgage payments that take care of PMI plus taxes, principal, and interest.
The Consumer Financial Protection Bureau allows the homeowner to ask for cancellation of the PMI once the principal balance reaches 80% of the home’s original value. In fact, lenders are obligated to automatically stop PMI payment when that principal hits 78%.
Have property taxes trimmed down
A Forbes.com article cites the National Taxpayers Union as saying that 60% of properties are overvalued. Since not many homeowners are adept with tax valuations, they simply continue with payments, not knowing that the local tax assessor can actually help in trimming down this financial obligation.
A home’s appraised value is the strongest argument you can use to lower your taxes. Recent home sales in the neighborhood and the amount of taxes a neighbor pays should also be taken into account.
Find out the value of equity
In deducting your home’s current market value from your outstanding mortgage balance, you’ll get the value of the equity you’ve already accumulated over time. This knowledge allows homeowners to sell their property faster because they know the difference between their equity and the proceeds of their home sale.
If you know how much equity you have, you can apply for a Home Equity Line of Credit. Use this to invest in home upgrades that will, in turn, raise your home value even more.
Decide when it’s time to sell
Knowing a property’s current value, coupled with research on market trends, growths, or challenges in the area, can give you a good picture of the best time to put your home in the market. Consulting with a real estate professional who possesses the knowledge and expertise of the local market climate will definitely work to your advantage.
You don’t need to look far for that kind of real estate expertise you require. Let Palm Springs Realtor John Butler help you. Call him at 760.989.2030 or email AmazingDesertHomes(at)gmail(dotted)com today.