An appraisal is an important step in the home buying process. Basically, an appraisal is a professional evaluation of the market value of the home you’d like to purchase. Appraisals are ordered by the lender to confirm or verify the value of the home prior to lending a buyer money for the purchase. On the other hand, a home inspection is different from an appraisal. How so? Home inspections assess the condition of the home before the transaction is finalized. 

Let’s take a closer look at the two and find out why a home appraisal and a home inspection is needed. 

What is a Home Appraisal?

The National Association of Realtors (NAR) explains:

“A home purchase is typically the largest investment someone will make. Protect yourself by getting your investment appraised! An appraiser will observe the property, analyze the data, and report their findings to their client. For the typical home purchase transaction, the lender usually orders the appraisal to assist in the lender’s decision to provide funds for a mortgage.”

An appraisal is required by the lender. When you apply for a mortgage, an unbiased appraisal is the best way to confirm the value of the home based on the sales price. Regardless of what you’re willing to pay for a house, if you’ll be using a mortgage to fund your purchase, the appraisal will help make sure the bank doesn’t loan you more than what the home is worth.

In today’s sellers’ market having an appraisal is extremely important especially when low inventory is driving an increase in bidding wars which can increase home prices. When sellers are in a strong position like this, they tend to believe they can set whatever price they want for their house under the assumption that competing buyers will be willing to pay more.

Lenders will only allow the buyer to borrow based on the value of the home. All in all, this is what helps keep home prices fair. If there’s every any discrepancy between the appraisal and the sale price of the home, your Real Estate Agent can help you navigate any additional negotiations.

What is a Home Inspection?

Here’s the key difference between an appraisal and an inspection. MSN explains:

“In simplest terms, a home appraisal determines the value of a home, while a home inspection determines the condition of a home.”

With a home inspection, one can determine the current state, safety, and condition of the home before the sale is made. If anything is questionable in the inspection process – like the age of the roof, the state of the HVAC system, or just about anything else – you as a buyer have the option to discuss and negotiate any potential issues or repairs with the seller before the transaction is final. Your Real Estate Agent can help you through this part of the process as well.

In a recent blog on 'What Should You Expect From a Home Inspection', find out how to choose an inspector, what you should expect during the inspection and learn about the things the inspector will review. 

Bottom Line

The appraisal and the inspection are critical steps when buying a home, and you don’t need to manage them by yourself.

Have questions? Reach out to us today and we’ll give you the expert guidance you deserve to navigate through the entire home buying process.

Homeowners Associations (HOAs) often manage community interests, including maintenance of common areas and cohesion of community atmosphere, in a development.

Condominium buildings almost always have an HOA. Planned communities with common areas and amenities or the goal of adhering to certain standards often have HOAs, too. For more information on Condos and their HOA fees (and rules) check out our blog here.

Buyers will be bound by guidelines contained in a set of bylaws. An elected board of homeowners governs the HOA.

How much does an HOA cost?

HOA fees range from a low annual payment to monthly charges. Fees can cover taxes, insurance, utilities, maintenance and even staffing for common areas, amenities, and security.

The cost to homeowners is calculated by dividing total expenses among the number of individual properties. In some cases, like condos, costs will be prorated based on the size of the unit. HOA fees will be considered for qualification of your mortgage loan.

What should I know before I buy?

It’s important for buyers and legal counsel to review all HOA documents before a purchase to ensure activities planned for the property, such as renovations or rentals, are allowed.

An HOA can enhance life in your community by taking care of common interests and protecting property values. If you have questions about HOAs or home financing in general, contact Erin the Expert!

Mortgage forbearance provided a lifeline for many homeowners during the COVID-19 pandemic. In February 2021, according to an article on Forbes.com, 2.7 million homeowners were enrolled in forbearance plans.

A forbearance plan is an agreement that allows homeowners experiencing a temporary hardship to make a reduced mortgage payment (or no payment at all) during the plan’s term. Someone who received forbearance, will eventually have to repay any amounts not paid during the plan.

This past year we’ve seen many extensions on mortgage forbearance plans to help homeowners in distress. In March, the FHA gave qualifying borrowers three more months of forbearance which meant homeowners had until June 30th to exit.

According to Mortgage Bankers Association (MBA), data through March 28, 201 shows that 48.9% of homeowners who have left forbearance were current on their mortgage payments.

Now, with forbearance periods coming to an end, some homeowners are confused about how they’ll be required to pay back the amounts not paid. However, with after-forbearance options in place, homeowners have options to help get them back on track.

Your mortgage servicer (the company to which you make your mortgage payments to) should contact you about 30 days before your forbearance ends to discuss options. Be honest. Let them know what your current situation looks like so they can help you come up with the best financial game plan. If you haven’t heard from your servicer, take the initiative to reach out as soon as possible. Be patient as you may expect some delays.

Repayment Options

• Reinstatement: This option allows you to pay off the forbearance amount all at once if you’re able to.
• Repayment: Pay off forbearance amount over time by adding some of the amount you owe to your normal monthly payments.
• Covid-19 Payment Deferral: Add the missed amount to the end of your mortgage term. If you sell or refinance your home before that, then they payment is due at closing.
• Modification: If your hardship is permanent, you may be eligible to change your loan terms to make payments affordable. You may need to show that you can make the new payment for a trial period.
• Extend Forbearance: Under the CARES Act, if hardship continues discuss extending the forbearance with your mortgage servicer.

The right repayment option will depend of your current financial situation, job status, and ability to resume your monthly mortgage payments. When you contact your mortgage servicer, you’ll be able to discuss each option and find the one that best fits your current situation.

Let’s take a look at a few other options.

Refinancing After Forbearance

Typically, you will not be able to refinance after forbearance right away. For most loan types, you’ll need to have made at least three consecutive payments after exiting forbearance in order to be eligible. If you can lock in a lower interest rate and monthly payment, you may be able to make your mortgage payments more affordable.

Selling Your Home

The housing market is hot right now and if you’re willing to make a move this may be a good option.

Depending on how much equity you’ve built up, you may be able to sell your current house and use that equity to pay off the existing mortgage or you could use that money for a down payment on a less expensive house.

According to a recent CoreLogic Home Equity Report, the average equity of mortgaged homes is currently $204,000 and on top of that 38% of homes do not have a mortgage, so the level of equity available to today’s homeowners is significant.

What are the benefits of selling your home while in forbearance?

• You can take advantage of rising home values
• You can pay off your current loan early, along with extra payments you owe for forbearance and make a profit!
• Ability to upgrade or downsize to a new home
• Maintain a good credit standing
• Pay off any other debt or create a cash cushion if possible 

Buying a New Home

Having been in mortgage forbearance should not keep you from buying a new home down the road. However, the rules for buying a new home are similar to refinancing and you’ll still have to meet the basic mortgage requirements.

Bottom Line:

Mortgage forbearance may be coming to an end for some, but there are options. Whether you’re ready to start making payments or need an extension you’ll have to speak with your mortgage servicer to come up with a plan you’re most comfortable with.

Whether it’s a quick refresh or getting your house ready to be listed for sale, making changes doesn't have to be a big project, sometimes simple updates can go a long way. 

Here are 5 ways to add curb appeal to your home without breaking the bank. 

1. Painting your front door 

2. Planting a tree or adding flower boxes 

3. Add potted plants for symmetry 

4. Changing your mailbox

5. Adding furniture

#1 | Brighten up the outside of your home by adding some color to your door. This simple trick helps draw people in and creates that “standout” factor. Not only will this be inviting for guests but can also help them easily find you and they will instantly feel welcomed. 

#2 | We all know a house or two in our neighborhood that makes us stop and stare because of how beautiful their tree or flower boxes look from afar. What if that house was yours? Nothing ties in the outside of a home better than an arrangement of tree or a couple of flower boxes. 

#3 | If trees and flower boxes are too big of a change, perhaps adding potted plants on either side of your door can help do the trick. This creates symmetry between the two sides and the illusion of formality and a wider entryway. 

#4 | When it comes to creating curb appeal, the last thing on your mind might be upgrading your mailbox, but this is a simple yet effective way to do just that. Adding a little character and charm can be as simple as changing out that old mailbox for a new one. 

#5 | Adding furniture is another great way to create curb appeal. Not only does this make the front of your home look amazing, but on those warm days, you can take refuge right in front of your home. 

Any or all of these additions can make for a fun project that will add value and create a home you're proud of.

June is National Homeownership Month and Greenway Mortgage is celebrating all month long.

For many generations, owning a home has been a source of pride and security.  In fact, it has always been considered a major part of the American Dream. From rural counties to bustling cities, owning a home offers an opportunity to lay down roots, start a family and embark on new beginnings.  And now, more than ever, our homes have become an integral part of our lives. With millions of people stuck in their homes this past year, the pandemic has definitely changed the meaning and the experience of “home”. They’re much more than the houses we live in. They’re our workplaces, virtual schools, and safe havens that have provided shelter, stability, and protection. 

Even with a new perspective on homeownership, the benefits that it brings to families, neighborhoods, and communities across America have not. 

How It All Started

National Homeownership Month started as a week-long celebration of homeownership during the Clinton administration in 1995. In 2002, President George W. Bush proclaimed June as the National Homeownership Month. Today, the mortgage industry continues the message of helping people realize the dream of responsible homeownership.

Non-Financial Benefits

Owning a home brings families a sense of happiness, satisfaction, and pride.

• Pride of Ownership: A place to call your own. You’ll be able to customize it according to your likes and personality without anyone telling you how.
• Civic Participation: Homeownership creates stability, a sense of community, and increases civic engagement.
• Provides Stability and creates a positive environment for families.

Financial Benefits

Buying a home is also an investment in your family’s financial future.

• Forced Savings: Your monthly mortgage payment is a form of ‘forced savings’ building your net worth with every payment!
• Home Equity: Homeownership builds equity every month. You can use that equity to start a business, pay off debt, send your kids to college and so much more.
• Appreciation: Home prices increase annually which helps to create a safety net.
• Net worth: A homeowners’ net worth is 44x greater than renters! This gives you the financial freedom to invest.
• Stability: Rent prices may increase each year. However, a fixed mortgage payment allows you to save for future projects and guard against inflation.
• Tax Benefits: Speak with your CPA to discuss the possible tax benefits homeownership can bring you.

Economic Benefits

Homeownership is even a local economic driver.

• Housing-Related Spending: House-related expenses account for more than one-sixth of the country’s economic activity over the past three decades.
• GDP Growth: Homeownership drives GDP growth as the country aims to make an economic rebound.
• Entrepreneurship: Since homeownership is a form of ‘forced savings’, it helps to provide entrepreneurial opportunities as well for those who want to start or expand a business. In turn, this generates new jobs.

Bottom Line

Homeownership is and will always be part of the American Dream. There are many financial and non-financial benefits to take advantage of when owning a home.

Greenway Mortgage is proud to be a part of the industry that makes homeownership a reality for so many Americans! If owning a home is part of your dream, reach out to us to get your journey started.

Resources

To encourage and educate aspiring home buyers, Greenway offers free information and resources. You can visit us online to learn more.

• FREE First-Time Home Buyer eBOOK – includes handy resources & checklists
• First-Time Home Buyer RESOURCES – check out our first-time buyer programs!
• Home Buying Comparison Chart - take this chart with you during your home search!
• Buying Your First Home – learn everything you need to know!
• Mortgage Calculators – we have an entire library of easy-to-use calculators!
• Mortgage Terms – get up to speed on some mortgage terminology
• What to Expect During the Mortgage Process
• Get a FREE pre-approval
• Contact Erin The Expert
• Download Erin's Mobile Mortgage App
• Ready to get started? Apply Now using our online application.