Home Equity Loans – Beware Of Appraisal Fraud
By Charles Essmeier
A new report by the independent Demos group has revealed what
may not be a surprise to many people – corruption is rampant in
the home appraisal industry. The bust in the dot-com market of
some five years ago has left would-be lenders with a surplus of
cash to lend. This has led to a huge boom in both mortgage and
home equity loan lending. That’s not a bad thing; a record 69%
of Americans now own their own homes. Owning a home is easier
than ever; in 2004 the average down payment was a record low of
only three percent.
So if everyone is buying a home, and loans are easier to obtain
than ever, what is the problem? The problem is that nearly 55%
of the appraisers polled in the survey said that they had been
pressured by lenders to deliver appraisals that met a “target”
value. The appraisers said that failure to meet the “target”
value resulted in either their not being paid, or not being
hired again. Since most appraisers want to keep working, they
have had a tendency to meet the target value, even if it means
that they have overestimated the value of the property. This
drives prices artificially higher and leaves many homeowners
with mortgages that may be worth more than the homes they were
meant to finance. This problem becomes acute should the owner
need to sell the home, only to discover that it isn’t worth as
much as he or she owes on it.
The worst-case scenario to result from this would be a burst in
the current real estate “bubble” and a nationwide collapse in
home values, leading to massive foreclosures. This probably
will not happen, but there are several things prospective
borrowers can do to avoid being caught in the appraisal trap:
# *Become educated about the appraisal and lending process. The
more informed you are, the less likely you are to be caught in a
scam.
# *Be aware that refinancing your home isn’t a cure to all
problems. It may seem appealing to use the equity in your home
for such uses as debt consolidation but if the result of that
is that you owe more on your home than it is worth, you
probably haven’t gained anything.
# *Be active in the appraisal process. Talk to the appraiser,
and ask to see the finished appraisal, along with the data used
to create it. Appraisals are based in part on the sales of
similar properties in your area. Check them out yourself and
compare the home you saw with the stated appraisal value.
# *Be bold. Ask your lender if they pressure their appraisers
to provide inflated values. You might not get an honest answer,
but pay attention to how they respond. You might be able to
determine if they are lying.
Ultimately, if you take out a home equity loan or a mortgage
for more than your home is worth, you are the one that suffers.
That can be easily avoided if you simply pay more attention to
the process and educate yourself about the possible pitfalls.
The last thing you want to lose is your home.
About the Author: ©Copyright 2005 by Retro Marketing. Charles
Essmeier is the owner of Retro Marketing, a firm devoted to
informational Websites, including http://www.End-Your-Debt.com/
and http://www.HomeEquityHelp.net/
Source: http://www.isnare.com
Sunday, June 10, 2007
Saturday, June 9, 2007
How Home Improvement Can Help You Increase The Value Of Your House
Increasing your home's value means that you can increase your asking price, ultimately resulting in a larger profit from the sale of your home.
If you are selling your own home, you, undoubtedly want to increase the value of your home as much as possible before putting it on the market.
(There is a link to download a free ebook, that gives you 101 Tips For Selling Your House, at the bottom of this page).
Increasing your home's value means that you can increase your asking price, ultimately resulting in a larger profit from the sale of your home.
The more of these tips you can follow, the more your house will be worth.
When you start thinking of ways to increase the value of your for sale by owner home, you think of home improvements.
Indeed improving certain aspects of your for sale by owner home will increase the value, thereby allowing you to increase your asking price. Before you start knocking down walls and adding on new bedrooms, there are a few guidelines to take into consideration.
Improvements done to for sale by owner homes do not always provide the highest return on investment.
If your house is in good condition, improvements probably won't increase your for sale by owner home value dollar for dollar based on the cost.
For example, if you spent $1,000 making improvements to your home, you couldn't necessarily increase your home price by $1,000. Home improvements DO increase the value of a home that is in poor condition.
If you are thinking about doing some repairs or renovations, the best rooms are kitchens and bathrooms.
These are the two rooms that buyers are most concerned about looking up to date. In many cases, you can do minor work to both of these rooms and receive a greater value in the home than if you did a major remodeling job.
Of all the improvements you can do to your for sale by owner home, minor remodeling of your kitchen has the most payout. Next on the list is adding a bathroom, major kitchen remodeling and adding a family room. There is an even lower payout for adding a deck or replacing windows or siding.
The best rule of thumb when you are selling a for sale by owner home is to avoid doing home improvements unless the condition of the house is so poor that you can't sell it otherwise. Some of these items will come up in a home inspection or appraisal. Others you might be able to easily identify.
For example, if the for sale by owner home has a leaky roof, it must be repaired or replaced before you can sell it. There are few buyers that will purchase a home with a roof that leaks.
Some improvements can be completed if you can do it yourself for a lower cost. You can expect to get the same type of increase in the value of the for sale by owner home.
This gives you a much better return on the investment you put into the home. Be careful though, poor home improvements will end up decreasing the value of the home rather than increasing it. Poor work ends up costing you more in the end, not only because of the money spent on the improvement, but also because of the resulting decrease in for sale by owner home value.
If you are selling your own home, you, undoubtedly want to increase the value of your home as much as possible before putting it on the market.
(There is a link to download a free ebook, that gives you 101 Tips For Selling Your House, at the bottom of this page).
Increasing your home's value means that you can increase your asking price, ultimately resulting in a larger profit from the sale of your home.
The more of these tips you can follow, the more your house will be worth.
When you start thinking of ways to increase the value of your for sale by owner home, you think of home improvements.
Indeed improving certain aspects of your for sale by owner home will increase the value, thereby allowing you to increase your asking price. Before you start knocking down walls and adding on new bedrooms, there are a few guidelines to take into consideration.
Improvements done to for sale by owner homes do not always provide the highest return on investment.
If your house is in good condition, improvements probably won't increase your for sale by owner home value dollar for dollar based on the cost.
For example, if you spent $1,000 making improvements to your home, you couldn't necessarily increase your home price by $1,000. Home improvements DO increase the value of a home that is in poor condition.
If you are thinking about doing some repairs or renovations, the best rooms are kitchens and bathrooms.
These are the two rooms that buyers are most concerned about looking up to date. In many cases, you can do minor work to both of these rooms and receive a greater value in the home than if you did a major remodeling job.
Of all the improvements you can do to your for sale by owner home, minor remodeling of your kitchen has the most payout. Next on the list is adding a bathroom, major kitchen remodeling and adding a family room. There is an even lower payout for adding a deck or replacing windows or siding.
The best rule of thumb when you are selling a for sale by owner home is to avoid doing home improvements unless the condition of the house is so poor that you can't sell it otherwise. Some of these items will come up in a home inspection or appraisal. Others you might be able to easily identify.
For example, if the for sale by owner home has a leaky roof, it must be repaired or replaced before you can sell it. There are few buyers that will purchase a home with a roof that leaks.
Some improvements can be completed if you can do it yourself for a lower cost. You can expect to get the same type of increase in the value of the for sale by owner home.
This gives you a much better return on the investment you put into the home. Be careful though, poor home improvements will end up decreasing the value of the home rather than increasing it. Poor work ends up costing you more in the end, not only because of the money spent on the improvement, but also because of the resulting decrease in for sale by owner home value.
Friday, June 8, 2007
Home Loans Use For Maximum Benefit
Home Loans Use For Maximum Benefit
By Joseph Kenny
While home loans can put you in serious debt if you don't use
them properly, there are a number of ways you can use them to
work to your advantage. In this article I will go over some
things you can do with your home loan to improve your personal
finances. The first thing many people do is use their home
loans to consolidate other loans they have.
Home Loans are Cheap!
While this is a common method that is used to lower monthly
payments, there are also some risks involved. Home loans are
good because they can allow you to combine your credit cards
and other loans into one monthly payment that may be lower. The
interest rate may also be lowered as well. At the same time,
this may not always be the case, and some people use their home
loans for consolidation only to find that the interest rate is
higher. It is important to do your research to make sure you
bills will be lower once you've consolidated your debt.
Loan Consolidation
In addition to the money you will save with a home loan, you
will also have more income at your disposal. This money can be
saved or you may choose to invest it. Using a home loan for
debt consolidation can also improve your credit over the long
term, because your low monthly payment will make you less of a
risk to lenders. When you have a large amount of debt, your
credit could end up damaged. However, homeowners who don't
exercise discipline could find themselves in more debt. You may
also want to look at debt counseling service to learn how to
keep your debt under control.
The One and Only
Once you have used your home loan to consolidate your debt, it
may be a good idea to begin using cash as much as possible. If
the home loan is still outstanding, avoid taking out any more
loans. Another great use for home loans is home improvements.
Your house is an investment, and the more you put into it, the
more you will get back. Adding improvement to your home can
greatly increase its value, and you could earn a lot of money
if you decide to sell it one day.
Drawbacks of the Home Loan
The only problem with home improvement is making the wrong
choices. You want to spend money-improving areas that will
greatly increase the value of the home. Remodeling either the
kitchen or bathroom will bring the most value to your home. You
want to make sure the improvements you make enhance the beauty
of the home. While adding carpet and paint to the home won't
greatly increase the value, it will make the house easier to
sell if it is done properly.
However, it is important to remember that lenders who know you
are trying to sell your home are not likely to give you a home
loan. If they do, you can expect to have more costs. It is also
important to remember that if you sale the home, you will need
to make enough to cover the mortgages and other costs. Another
good use for home loans is paying for the cost of education for
your children. Like home improvements, using a home loan to pay
for the cost of education can be an investment. It can keep
your children out of debt.
Despite this, many parents will be nearing retirement when
their children head to college. Some parents may need the home
loans to deal with the effect of not having an income from a
job. The last thing that many people do with home loans is buy
things they want, such as a boat or a nice car. If you get in a
situation where you have medical bills, a home loan may also be
able to help you.
About the Author: Joe Kenny writes for the loan comparison
sites http://www.selectloans.co.uk and also
http://www.ukpersonalloanstore.co.uk
Source: http://www.isnare.com
By Joseph Kenny
While home loans can put you in serious debt if you don't use
them properly, there are a number of ways you can use them to
work to your advantage. In this article I will go over some
things you can do with your home loan to improve your personal
finances. The first thing many people do is use their home
loans to consolidate other loans they have.
Home Loans are Cheap!
While this is a common method that is used to lower monthly
payments, there are also some risks involved. Home loans are
good because they can allow you to combine your credit cards
and other loans into one monthly payment that may be lower. The
interest rate may also be lowered as well. At the same time,
this may not always be the case, and some people use their home
loans for consolidation only to find that the interest rate is
higher. It is important to do your research to make sure you
bills will be lower once you've consolidated your debt.
Loan Consolidation
In addition to the money you will save with a home loan, you
will also have more income at your disposal. This money can be
saved or you may choose to invest it. Using a home loan for
debt consolidation can also improve your credit over the long
term, because your low monthly payment will make you less of a
risk to lenders. When you have a large amount of debt, your
credit could end up damaged. However, homeowners who don't
exercise discipline could find themselves in more debt. You may
also want to look at debt counseling service to learn how to
keep your debt under control.
The One and Only
Once you have used your home loan to consolidate your debt, it
may be a good idea to begin using cash as much as possible. If
the home loan is still outstanding, avoid taking out any more
loans. Another great use for home loans is home improvements.
Your house is an investment, and the more you put into it, the
more you will get back. Adding improvement to your home can
greatly increase its value, and you could earn a lot of money
if you decide to sell it one day.
Drawbacks of the Home Loan
The only problem with home improvement is making the wrong
choices. You want to spend money-improving areas that will
greatly increase the value of the home. Remodeling either the
kitchen or bathroom will bring the most value to your home. You
want to make sure the improvements you make enhance the beauty
of the home. While adding carpet and paint to the home won't
greatly increase the value, it will make the house easier to
sell if it is done properly.
However, it is important to remember that lenders who know you
are trying to sell your home are not likely to give you a home
loan. If they do, you can expect to have more costs. It is also
important to remember that if you sale the home, you will need
to make enough to cover the mortgages and other costs. Another
good use for home loans is paying for the cost of education for
your children. Like home improvements, using a home loan to pay
for the cost of education can be an investment. It can keep
your children out of debt.
Despite this, many parents will be nearing retirement when
their children head to college. Some parents may need the home
loans to deal with the effect of not having an income from a
job. The last thing that many people do with home loans is buy
things they want, such as a boat or a nice car. If you get in a
situation where you have medical bills, a home loan may also be
able to help you.
About the Author: Joe Kenny writes for the loan comparison
sites http://www.selectloans.co.uk and also
http://www.ukpersonalloanstore.co.uk
Source: http://www.isnare.com
Thursday, June 7, 2007
Homeowners Insurance Discounts: The Best Methods Of Finding Them
There is no way around needing Homeowners insurance if you are about to embark on the journey of purchasing a home. Depending on the size of the home, Homeowners insurance can cost as little as $400 a year to as much as $2000 a year, if not more in some parts of the country.
There is no way around needing Homeowners insurance if you are about to embark on the journey of purchasing a home. Depending on the size of the home, Homeowners insurance can cost as little as $400 a year to as much as $2000 a year, if not more in some parts of the country. The amount of Homeowners insurance you receive will also be determined by the value of the interior property, including the upkeep of remodeling on the home, as well as whether your policy will include valuable electronics and jewelry.
Once you have determined what type of policy you would like to implement, you can begin discussing yearly and monthly costs with insurance agents. One thing to keep in mind while you are searching for Homeowners insurance is that the rates won't vary that much between each company, but there are small ways to save a few dollars to a few hundred dollars, simply by finding some Homeowners insurance discounts that are available.
One of the easiest ways to receive a discount on Homeowners insurance is to install a home security system, and not the type that barks and growls. Many insurance companies are actually paired up with security companies like ADT or Brink's and will give you a discount for using that insurance company and that security company as well.
Even if you get Homeowners insurance and decide to go back later and install a security system, don't forget to go back and call your Homeowners insurance company once the system is installed so that you can receive a discount on your insurance. Further discounts may be given for motion sensors or even for video surveillance cameras installed on the home.
Another great way to receive a small discount on your Homeowners insurance is through fire and carbon monoxide detectors and fire resistant doors, brick and even walls. Remember that not all companies will offer the same discount for fire resistance and fire protection, so it is best to do research on how much of a discount can be received before diving in to remodeling the entire house for fire resistance.
Keeping up with newer appliances is another excellent way to help receive a Homeowners insurance discount. Older appliances are more likely to develop bad electrical connections, which can make the home susceptible to fire.
The first place to begin updating appliances is in the kitchen because kitchens are on the top of the list for places where fires begin. Many other insurance companies will offer a discount for new plumbing and electrical systems, or simply for a home that is less than ten years old altogether.
While some homeowners aren't willing to consider a higher insurance deductible, or the price they will pay before the insurance will begin paying for loss or damages, asking for price quotes with higher deductibles is an excellent way to receive a discount on your insurance.
Most Homeowners insurance companies start out with a minimum deductible of $250 to $500 dollars, but try raising the deductible by $250 and see how much this will save you a year. Often times, this can make a difference of nearly $100-$150 a year on the total insurance bill.
Remember, though, that if you choose this route, you may end up paying more than that $150 savings a year if something happens to your home and you have to pay the higher deductible. Simply weight the negatives and positives and decide if a higher deductible is right for you.
The final sure fire way to receive a Homeowners insurance benefit is to belong to a club or certain group. This could simply mean being in the "65 and older" club and receiving a senior citizens discount, or it could also mean already being a member of the bank where you are looking to purchase Homeowners insurance. Some insurance companies also give a discount if you plan on having both your car insurance and Homeowners insurance with that company.
Before settling for the first set of numbers thrown at you by the insurance company, be sure to ask about these discounts and make your assets work for you when shopping for Homeowners insurance.
There is no way around needing Homeowners insurance if you are about to embark on the journey of purchasing a home. Depending on the size of the home, Homeowners insurance can cost as little as $400 a year to as much as $2000 a year, if not more in some parts of the country. The amount of Homeowners insurance you receive will also be determined by the value of the interior property, including the upkeep of remodeling on the home, as well as whether your policy will include valuable electronics and jewelry.
Once you have determined what type of policy you would like to implement, you can begin discussing yearly and monthly costs with insurance agents. One thing to keep in mind while you are searching for Homeowners insurance is that the rates won't vary that much between each company, but there are small ways to save a few dollars to a few hundred dollars, simply by finding some Homeowners insurance discounts that are available.
One of the easiest ways to receive a discount on Homeowners insurance is to install a home security system, and not the type that barks and growls. Many insurance companies are actually paired up with security companies like ADT or Brink's and will give you a discount for using that insurance company and that security company as well.
Even if you get Homeowners insurance and decide to go back later and install a security system, don't forget to go back and call your Homeowners insurance company once the system is installed so that you can receive a discount on your insurance. Further discounts may be given for motion sensors or even for video surveillance cameras installed on the home.
Another great way to receive a small discount on your Homeowners insurance is through fire and carbon monoxide detectors and fire resistant doors, brick and even walls. Remember that not all companies will offer the same discount for fire resistance and fire protection, so it is best to do research on how much of a discount can be received before diving in to remodeling the entire house for fire resistance.
Keeping up with newer appliances is another excellent way to help receive a Homeowners insurance discount. Older appliances are more likely to develop bad electrical connections, which can make the home susceptible to fire.
The first place to begin updating appliances is in the kitchen because kitchens are on the top of the list for places where fires begin. Many other insurance companies will offer a discount for new plumbing and electrical systems, or simply for a home that is less than ten years old altogether.
While some homeowners aren't willing to consider a higher insurance deductible, or the price they will pay before the insurance will begin paying for loss or damages, asking for price quotes with higher deductibles is an excellent way to receive a discount on your insurance.
Most Homeowners insurance companies start out with a minimum deductible of $250 to $500 dollars, but try raising the deductible by $250 and see how much this will save you a year. Often times, this can make a difference of nearly $100-$150 a year on the total insurance bill.
Remember, though, that if you choose this route, you may end up paying more than that $150 savings a year if something happens to your home and you have to pay the higher deductible. Simply weight the negatives and positives and decide if a higher deductible is right for you.
The final sure fire way to receive a Homeowners insurance benefit is to belong to a club or certain group. This could simply mean being in the "65 and older" club and receiving a senior citizens discount, or it could also mean already being a member of the bank where you are looking to purchase Homeowners insurance. Some insurance companies also give a discount if you plan on having both your car insurance and Homeowners insurance with that company.
Before settling for the first set of numbers thrown at you by the insurance company, be sure to ask about these discounts and make your assets work for you when shopping for Homeowners insurance.
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