Rufo Realty | Newton Real Estate, Brighton Real Estate, Waltham Real Estate, Wellesley Real Estate


Ready to purchase your dream home? Before you finalize a home purchase, it may be worthwhile to schedule a home appraisal.

With a home appraisal, a property expert will examine a residence both inside and out. The home appraiser then will offer a property valuation.

In some instances, a home offer may be appraisal-contingent. And if the home appraisal valuation falls below the amount of a buyer's offer, the buyer may request a renegotiated price.

A home appraisal may prove to be an important part of the homebuying process. As such, it is paramount for homebuyers to understand what an appraisal is all about and determine whether to conduct an appraisal.

To better understand home appraisals, let's take a look at three home appraisal facts that every homebuyer needs to consider.

1. An appraiser's valuation is his or her opinion of what a residence is worth.

Typically, a home appraiser will use a broad assortment of housing market data as part of a home assessment. The appraiser also will look closely at a residence as part of the home evaluation process.

Although a home appraisal is based on housing market data and a home assessment, it is essential to note that a home valuation is an appraiser's opinion. Therefore, two home appraisers may examine the same housing market data and the same house and come up with two different home valuations.

2. The homes in a neighborhood may affect the valuation of a residence.

Believe it or not, a home's value may be impacted by those around it. Thus, if you intend to buy a home, it often pays to evaluate the neighborhood to better understand whether a house's value will decline, stay the same or increase over time.

Furthermore, what you spend to improve a house is unlikely to raise a house's value proportionately. And if you spend $20,000 on home improvements, there are no guarantees that these home improvements will add $20,000 to a home's valuation.

3. A home appraisal and a home inspection are two very different things.

A home inspection often is considered a must-have during the homebuying process, and perhaps it is easy to understand why.

During a home inspection, a property expert will ensure there are no structural issues with a home and identify any problem areas. Then, a homebuyer can move forward with a home purchase, rescind a home offer or submit a counter proposal based on a home inspection report.

On the other hand, a home appraisal enables a property expert to evaluate the house in its current state. A home appraiser will compare and contrast a home in relation to others in the area and offer a valuation.

If you need help determining whether to conduct a home appraisal, a real estate agent is happy to assist you. With a real estate agent at your side, you can determine whether to set up a home appraisal prior to finalizing a home purchase.



18 CLAFLIN PLACE, Newton, MA 02460

Rental

$2,150
Price

5
Rooms
2
Beds
1
Baths
Beautiful and spacious 2bed/1bath apartment in desirable Newtonville location! Apartment is on the first floor of a two-family home. Hardwood floors throughout. Living room with a decorative fireplace. Dining room with built-in shelves. One spacious bedroom, a ceramic tiled bathroom, a second smaller bedroom or office, and a large eat-in-kitchen with dishwasher, disposal, newer appliances, and gas cooking. Gas heat. Replacement, double pane windows. Huge amount of extra storage in the basement. Shared backyard and patio perfect for grilling. One parking spot included in rent. 5 minute walk to Newton North High School, commuter rail, express bus, and Newtonville shops and restaurants! Sorry, no smokers. Available September 1.
Open House
No scheduled Open Houses

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26 WAVERLY STREET, Boston, MA 02135

Brighton

Rental

$1,950
Price

3
Rooms
1
Beds
1
Baths
Commuter's Dream! Heat, hot water, and parking spot INCLUDED in rental rate! Open concept unit filled with natural light, updated bath and kitchen with newer appliances, private deck and much more. Easily accessible to Mass Pike, Harvard and Central Squares, #70(A) & 86 buses, commuter rail, 8-minute walk to Boston Landing, home to New Balance HQs, Bruins and Celtics practice and training facilities. Walking distance to stores, restaurants, coffee shops. Steps to the Charles River, jog/bike path and kayaking. Window A/C. Unit is available 9/1/2020 – Sorry, no pets or smoking of any kind. Minimum 24 hours’ notice required for showings.
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11 ASHMONT AVENUE, Newton, MA 02458

Nonantum

Rental

$3,075
Price

11
Rooms
4
Beds
2
Baths
3-4 bedroom/2 bath Newton condo available July 15 or August 1. Walking distance to public transportation, shops, restaurants, parks, and much more. Lincoln-Eliot Elementary, Bigelow Middle School, Newton North High School. The first floor contains a freshly painted living room, dining room, and eat-in-kitchen in addition to three spacious bedrooms and a full bathroom. The lower level has another full bathroom as well as five additional finished rooms! These could serve as perfect home offices, entertainment rooms, a gym, storage, etc. Tons of space! Gas heat and gas cooking. Washer/dryer provided. Off-street parking for 2-3 cars tandem.
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Image by Arek Socha from Pixabay

If you bought a house that was over $484,350 prior to 2020, you had to get a jumbo loan, which is a non-conforming loan. The Federal Housing Finance Agency (FHFA) increased the limit on conforming loans to $510,400 in most areas. The FHFA also increased the loan limit to $765,600 in some high-cost areas, which include Alaska, Guam, Hawaii and the U.S. Virgin Islands. FHFA increased the loan limit for conforming loans because home prices increased by an average of 5.38 percent from the third quarter of 2018 to the third quarter of 2019.

What is a Conforming Loan?

A conforming loan follows standardized rules set by the Federal National Mortgage Association (FNMA / Fannie Mae) and the Federal Home Loan Mortgage Corporation (FHLMC / Freddie Mac). The two companies are government-sponsored, and they drive the home loan market. The most common standardized rule is the loan limit. Still, the two organizations dictate how much a loan-to-value ratio can be, your debt-to-income ratio, higher interest rates based on your credit score and what documentation you might need for a home loan. A conforming loan must also have private mortgage insurance (PMI) if the down payment is less than 20 percent.

Jumbo and Other Non-Conforming Loans

Banks do not like to write non-conforming loans because they cannot sell those loans to Fannie Mae and Freddie Mac, or most of the other smaller organizations that buy loans. The most common non-conforming loan is a jumbo loan – a loan that is outside the loan limit, which is increasing for 2020. Other types of non-conforming loans might include loans for people who do not meet the debt-to-income ratio or the loan-to-value ratio. Because those loans are riskier, they often come with higher interest rates. Generally, you must also have a very good credit score to qualify for most non-conforming loans, especially jumbo loans.

High-Cost Areas

While some states and territories were mentioned as high-cost areas above, some places in the continental United States are also considered to be high-cost areas. Washington, D.C. and some parts of California have the higher limit of $765,600 for 2020 because the prices of single-family homes are higher than average.

Qualifying for a Jumbo Loan

To qualify for a jumbo loan, you’ll have to jump through more hoops. Some factors a lender look for include:

  • A credit score of at least 700. Some lenders require a score of at least 720.

  • Your debt-to-income ratio (DTI). While non-conforming loans may go outside the typical DTI, some lenders might refuse to go over 45 percent.

  • The lender might require you to have cash reserves of several months to a year in the bank.

  • The lender might require extensive documentation. You might have to supply your complete tax returns and several months of bank statements for a jumbo loan.

  • Lenders might require a second appraisal of the home.

  • A larger down payment.

  • You might get a higher interest rate, depending on the lender, your financial situation and market conditions.

  • Closing costs are often higher because of the extra steps you must go through to qualify for the loan.

As with any loan, shop around for a jumbo loan instead of jumping at the first loan offered.




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