In case you are looking to tap some cash to consolidate debt, fund a home improvement project, or cover an emergency expense, then the financial reprieve you need may be at your front door. Firstly, you need to know how much equity you have in your home, which partly relies on getting your property appraised.
If you are looking for a faster and easier loan process that will help you reach your financial goals, whether that is for debt consolidation, post tuition, or similar, consider a home equity loans Chicago with a real-time home valuation tool, for a faster path there.
So, how easily and quickly can you access your cash? The Appraisal for home equity loans is usually one of the biggest holdups. Are all home equity loans requiring an appraisal? Are all the home appraisals the same? These are some of the questions we’ll answer in this article.
Are all home equity loans requiring an appraisal?
The answer is- yes. No matter the type, the lender will require an appraisal for a home equity loan, to protect itself from the risk of the default. If a borrower is not able to make his monthly payment over the long term, then the lender would like to know that it can recoup the cost of the loan.
The accurate Appraisal will protect the borrower (you) too. There are a couple of different types of home appraisals; some of them are cheaper, easier, and faster to obtain than the others. It’s up to the lender and, in some instances, to the federal law which one is required. If you familiarize yourself with the different appraisal types, then you can get ahead of the game.
The AVM – the Easiest Appraisal For the Home Equity Loans
The AVM or the Automated valuation method is a mathematical modeling technique which contrasts sales data and local property values to uncover a home’s expected market price. Some of the estimates you see on popular real estate websites are examples of AVM assessments.
The AVMs pulls historical MLS data in order to uncover past and new median and average home sales data. It also reveals broader neighborhood trends that are culled from income trends, the ratio of owner-occupied vs. investor-owned properties, nearby points of interest.
The automated valuation method is an easy and fast way to value your home, which means that homeowners can easily find out how much can be borrowed; in some cases, in a few short seconds.
To ensure that your property is valued as favorably as possible, dig into your neighborhood data on the major online retailers. Look for the comps that are might not and be prepared to discuss with the lender some of the undocumented trends.
A comprehensive walk-through approach
Some of the most conservative lenders require a full home appraisal for home equity loans, even though it’s a more time-consuming process, and it’s expensive. Besides, the upside is that the appraiser can take notes of any upgrades that you’ve made on your home and can include the value of each in your appraisal report.
Make sure to declutter the inside, make all of the necessary home repairs, and enhance your curb appeal before the Appraisal.
Understanding the Appraisal as a path to the success
It’s essential to note that your home needs to appraise at or above the amount that you want for your loan to be approved. The low Appraisal may prevent you from obtaining your funds. Despite the fact that it’s up to your lender to decide which appraisal method that suits their needs, understanding these choices and knowing how the appraisal works can lead to the success of your home equity loan journey.
Author | Emily Forbes
An Entrepreneur, Mother & A passionate tech writer in the technology industry!