Are you tired of lenders continual turning you down for refinance options or home equity loans? The problem may not be your credit, but rather a low home appraisal. The market value of your home is determined by the home appraisal and thus your eligibility for certain types of financial products. The Federal Reserve Board notes that in their guide on mortgage finances, that lenders will look carefully at the home’s market value in order to decide if a candidate is eligible for a refinance. There are certain things that can affect the value of the home including the upkeep of the surrounding amenities such pools, property or automated gates.
When the appraised value of the home is not greater or at least equal to the overall mortgage balance, then lenders are less likely to issue you a loan. The great news is, however, that you can do something about it.
Invest in Your Neighborhood
This might seem like an unusual step, but in the long run this will serve several positive purposes. Appraisers do not just look at your home, but they look at the neighborhood overall. If you and others in your community make a concerted effort to keep playgrounds, automated gates, and sidewalks clean and workable, the market value for all of the homes will increase or stay steady. Same goes for concerted efforts to cut down on crime through neighborhood watch programs. Staying an active member of your community and working toward improvements in schools, property, and crime reduction helps home values as well as improves the standard of living for you and your family.
Invest in Amenities
When you can add features that give your property an “x-factor” or a “wow factor” then you are increasing your home’s value and your chances of qualifying for financial products such as refinancing. You do not usually have to spend a fortune. Just look for cost effective projects that will make your home more appealing to appraisers or buyers if you are thinking of selling. Additions like great landscaping or wrought iron gates can totally transform a boring house into a spectacular house.
It is important not to go overboard with home improvements, however, because you do not want to invest so much that you cannot recoup that investment back. If your improvements go far beyond what any other home in your area has, then it is unlikely you will get that back in home value. Try to hit a nice middle ground.
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