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What is Appraised Value?

Appraisals provide an objective opinion of value, but it’s not an exact science so appraisals may differ.

For buying and selling purposes, appraisals are usually based on market value — what the property could probably be sold for. Other types of value include insurance value, replacement value, and assessed value for property tax purposes.

Appraised value is not a constant number. Changes in market conditions can dramatically alter appraised value.

Appraised value doesn’t take into account special considerations, like the need to sell rapidly.
Lenders usually use either the appraised value or the sale price, whichever is less, to determine the amount of the mortgage they will offer.

Used with permission from Kim Daugherty, Real Estate Checklists and Systems, www.realestatechecklists.com

Mortgage rates dip to new all-time low

The 30 year fixed rate fell to 5.01%, its lowest level since Freddie Mac started conducting its survey in 1971.

NEW YORK (CNNMoney.com) -- Mortgage rates fell to another all-time low, declining for the tenth consecutive week.
Government sponsored mortgage lender Freddie Mac said Thursday that fixed rates on 30-year mortgages averaged 5.01% for the week ending Jan. 8th. That's down from 5.10% last week and well below 5.87%, which is where the rate stood at this time last year.
The 30-year fixed rate mortgage has not been lower since Freddie Mac started conducting the survey in 1971.
Mortgage rates continue to respond to the Federal Reserve's decision to purchase mortgage backed securities from Fannie Mae (FNM, Fortune 500), Freddie Mac (FRE, Fortune 500) and Ginnie Mae, according to Frank Nothaft, Freddie Mac vice president and chief economist.
"On November 25, 2008, the Federal Reserve announced that it planned to purchase up to $500 billion of these securities by the end of June this year. For the sake of comparison, there were roughly $4.7 trillion of such securities backed by home mortgages available as of September 30, 2008," Nothaft said in a release Thursday.
The 15-year fixed rate mortgage this week averaged 4.62%, which is down from 4.83% last week. A year ago at this time, that rate averaged 5.43%.
The 15-year rate has not been this low since June 13, 2003, when it averaged 4.6%.
Five-year Treasury-indexed hybrid adjustable-rate mortgages (ARMs) averaged 5.49% this week, down from last week when they averaged 5.57%. At this time a year ago, the 5-year ARM averaged 5.63%.
And the one-year Treasury-indexed ARM averaged 4.95% this week, up from 4.85% last week. Last year, the 1-year ARM averaged 5.37%.
"Since the end of October 2008, these rates have declined by almost 1 1/2 percentage points," said Nothaft. "[That's a] payment savings of about $184 a month for a $200,000 loan - an additional $11 from last week."

Current Mortgage Rates (as of 1/9/09)

Current Mortgage Rates (Provided by Jennifer Brown- Loan South Mortgage)


Conforming 30 Year Fixed
4.875% Rate
5.031% APR
Pricing based on 720 credit score, 30% Debt to Income Ratio, 80% Loan to Value Ratio, $250000 Loan Amount, 30 Lock Days, Qualified Borrowers Only. When Mortgage Insurance is applicable, it is not calculated in the APR

Conforming 5 Year ARM
4.875% Rate
5.031% APR
Pricing based on 720 credit score, 30% Debt to Income Ratio, 80% Loan to Value Ratio, $250000 Loan Amount, 30 Lock Days, Qualified Borrowers Only. When Mortgage Insurance is applicable, it is not calculated in the APR

FHA 30 Year Fixed
4.875% Rate
5.082% APR
Pricing based on 720 credit score, 30% Debt to Income Ratio, 80% Loan to Value Ratio, $250000 Loan Amount, 30 Lock Days, Qualified Borrowers Only.

Non Conforming 30 Year Fixed
6.500% Rate
6.629% APR
Pricing based on 720 credit score, 30% Debt to Income Ratio, 80% Loan to Value Ratio, $600000 Loan Amount, 30 Lock Days, Qualified Borrowers Only.

Non Conforming 5 Year ARM
5.250% Rate
5.324% APR
Pricing based on 720 credit score, 30% Debt to Income Ratio, 80% Loan to Value Ratio, $600000 Loan Amount, 30 Lock Days, Qualified Borrowers Only.

5 Things to do Before Putting Your Home on the Market

1. Have a pre-sale home inspection. Be proactive by arranging for a pre-sale home inspection. An inspector will be able to give you a good indication of the trouble areas that will stand out to potential buyers, and you’ll be able to make repairs before open houses begin.

2. Organize and clean. Pare down clutter and pack up your least-used items, such as large blenders and other kitchen tools, out-of-season clothes, toys, and exercise equipment. Store items off-site or in boxes neatly arranged in the garage or basement. Clean the windows, carpets, walls, lighting fixtures, and baseboards to make the house shine.

3. Get replacement estimates. Do you have big-ticket items that are worn our or will need to be replaced soon, such your roof or carpeting? Get estimates on how much it would cost to replace them, even if you don’t plan to do it yourself. The figures will help buyers determine if they can afford the home, and will be handy when negotiations begin.

4. Find your warranties. Gather up the warranties, guarantees, and user manuals for the furnace, washer and dryer, dishwasher, and any other items that will remain with the house.

5. Spruce up the curb appeal. Pretend you’re a buyer and stand outside of your home. As you approach the front door, what is your impression of the property? Do the lawn and bushes look neatly manicured? Is the address clearly visible? Are pretty flowers or plants framing the entrance? Is the walkway free from cracks and impediments?

Does Moving Up Make Sense?

These questions will help you decide whether you’re ready for a home that’s larger or in a more desirable location. If you answer yes to most of the questions, it’s a sign that you may be ready to move.

1. Have you built substantial equity in your current home? Look at your annual mortgage statement or call your lender to find out. Usually, you don’t build up much equity in the first few years of your mortgage, as monthly payments are mostly interest, but if you’ve owned your home for five or more years, you may have significant, unrealized gains.

2. Has your income or financial situation improved? If you’re making more money, you may be able to afford higher mortgage payments and cover the costs of moving.

3. Have you outgrown your neighborhood? The neighborhood you pick for your first home might not be the same neighborhood you want to settle down in for good. For example, you may have realized that you’d like to be closer to your job or live in a better school district.

4. Are there reasons why you can’t remodel or add on? Sometimes you can create a bigger home by adding a new room or building up. But if your property isn’t large enough, your municipality doesn’t allow it, or you’re simply not interested in remodeling, then moving to a bigger home may be your best option.

5. Are you comfortable moving in the current housing market? If your market is hot, your home may sell quickly and for top dollar, but the home you buy also will be more expensive. If your market is slow, finding a buyer may take longer, but you’ll have more selection and better pricing as you seek your new home.

6. Are interest rates attractive? A low rate not only helps you buy a larger home, but also makes it easier to find a buyer.

Take the Stress Out of Homebuying

Buying a home should be fun, not stressful. As you look for your dream home, keep in mind these tips for making the process as peaceful as possible.

1. Find a real estate agent who you connect with. Home buying is not only a big financial commitment, but also an emotional one. It’s critical that the REALTOR® you chose is both highly skilled and a good fit with your personality.

2. Remember, there’s no “right” time to buy, just as there’s no perfect time to sell. If you find a home now, don’t try to second-guess interest rates or the housing market by waiting longer — you risk losing out on the home of your dreams. The housing market usually doesn’t change fast enough to make that much difference in price, and a good home won’t stay on the market long.

3. Don’t ask for too many opinions. It’s natural to want reassurance for such a big decision, but too many ideas from too many people will make it much harder to make a decision. Focus on the wants and needs of your immediate family — the people who will be living in the home.

4. Accept that no house is ever perfect. If it’s in the right location, the yard may be a bit smaller than you had hoped. The kitchen may be perfect, but the roof needs repair. Make a list of your top priorities and focus in on things that are most important to you. Let the minor ones go.

5. Don’t try to be a killer negotiator. Negotiation is definitely a part of the real estate process, but trying to “win” by getting an extra-low price or by refusing to budge on your offer may cost you the home you love. Negotiation is give and take.

6. Remember your home doesn’t exist in a vacuum. Don’t get so caught up in the physical aspects of the house itself — room size, kitchen, etc. — that you forget about important issues as noise level, location to amenities, and other aspects that also have a big impact on your quality of life.

7. Plan ahead. Don’t wait until you’ve found a home and made an offer to get approved for a mortgage, investigate home insurance, and consider a schedule for moving. Presenting an offer contingent on a lot of unresolved issues will make your bid much less attractive to sellers.

8. Factor in maintenance and repair costs in your post-home buying budget. Even if you buy a new home, there will be costs. Don’t leave yourself short and let your home deteriorate.

9. Accept that a little buyer’s remorse is inevitable and will probably pass. Buying a home, especially for the first time, is a big financial commitment. But it also yields big benefits. Don’t lose sight of why you wanted to buy a home and what made you fall in love with the property you purchased.

10. Choose a home first because you love it; then think about appreciation. While U.S. homes have appreciated an average of 5.4 percent annually over from 1998 to 2002, a home’s most important role is to serve as a comfortable, safe place to live.

Current Mortgage Rates (as of 1/2/09)

Current Mortgage Rates (provided by Jennifer Brown- Loan South Mortgage)


Conforming 30 Year Fixed
4.875% Rate
5.031% APR
Pricing based on 720 credit score, 30% Debt to Income Ratio, 80% Loan to Value Ratio, $250000 Loan Amount, 30 Lock Days, Qualified Borrowers Only. When Mortgage Insurance is applicable, it is not calculated in the APR

Conforming 5 Year ARM
4.875% Rate
5.031% APR
Pricing based on 720 credit score, 30% Debt to Income Ratio, 80% Loan to Value Ratio, $250000 Loan Amount, 30 Lock Days, Qualified Borrowers Only. When Mortgage Insurance is applicable, it is not calculated in the APR

FHA 30 Year Fixed
5.000% Rate
5.208% APR
Pricing based on 720 credit score, 30% Debt to Income Ratio, 80% Loan to Value Ratio, $250000 Loan Amount, 30 Lock Days, Qualified Borrowers Only.

Non Conforming 30 Year Fixed
6.750% Rate
6.880% APR
Pricing based on 720 credit score, 30% Debt to Income Ratio, 80% Loan to Value Ratio, $600000 Loan Amount, 30 Lock Days, Qualified Borrowers Only.

Non Conforming 5 Year ARM
5.250% Rate
5.324% APR
Pricing based on 720 credit score, 30% Debt to Income Ratio, 80% Loan to Value Ratio, $600000 Loan Amount, 30 Lock Days, Qualified Borrowers Only.

Tax Benefits of Homeownership

The tax deductions you’re eligible to take for mortgage interest and property taxes greatly increase the financial benefits of homeownership. Here’s how it works.
Assume:
$9,877 = Mortgage interest paid (a loan of $150,000 for 30 years, at 7 percent, using year-five interest)$2,700 = Property taxes (at 1.5 percent on $180,000 assessed value)______$12,577 = Total deduction
Then, multiply your total deduction by your tax rate.
For example, at a 28 percent tax rate: 12,577 x 0.28 = $3,521.56
$3,521.56 = Amount you have lowered your federal income tax (at 28 percent tax rate) Note: Mortgage interest may not be deductible on loans over $1.1 million. In addition, deductions are decreased when total income reaches a certain level.