Many people ask us regularly about their ability to obtain mortgage loans on their homes here in Peachtree City in the current recession. We should consider ourselves to be quite fortunate, as the values here have only dropped a small amount. That being said — mortgage financing in Peachtree in today’s market is all about the appraised value of your home.
You should always keep these things in mind as you plan what your home is worth in this market for a refinance or even to sell it. Peachtree City mortgage loans are based on several factors:
- income
- credit
- collateral — this is your house
Most people understand their income and credit, but seem to be less sure about how the values are calculated on an appraisal. In Peachtree City, the appraiser will identify 3-4 comparison homes that have sold recently – ideally in the past 60-90 days. In the current market, the only way lenders can get a true indication of value are recent sales. So….even though your neighbors home in Smokerise sold for $850k 10 mos. ago, your value is going to be based on the most recent sales. If there are good comps to your home more recently…say 2-4 months, your value in terms of the “sales comparison method” will be based on these comps.
This one fact catches many Peachtree City residents offguard when they are running basic analysis on the prospective new mortgage loan. If there is a takeaway – always estimate low. Banks are extremely conservative right now, and you will avoid significant heartache if you don’t set yourself up with an unrealistic value of your home. Remember, an appraisal is only an indication of what the market value of your home is at that point in time. In 6 months, the value may possibly be completely different.
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