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When you apply for a mortgage from a private lender, your credit is not an important part of the equation, but the condition of your property is even more important than it is when you apply for a mortgage through a bank or traditional lender. The reason for this that a private lender knows that a borrower is going to have some credit or income verification issues – otherwise they would be getting the lowest interest rates from an “A” lender. So private lenders look at the property a little harder to see what the house would yield in a foreclosure sale, in the unlikely event that you default on this mortgage agreement. These steps are helpful no matter why you are having a home appraisal – and they have worked for many of our customers in the past.
1. Clean the house. Then clean it again.
Or better yet, hire some home cleaners to come in and make your house spic and span. When the appraiser comes to visit, you want the house to look spotless, because if your home is dirty or messy when the appraiser comes, he will wonder how filthy it was when you weren’t trying to impress someone. Put the clutter away – toys in chests, papers in the kitchen drawers and in your desk. Hang up your clothes, or discreetly store them in the hamper.
2. Burnish your home’s curb appeal.
You want your home to look attractive from the first moment when the appraiser pulls up in front of your house. If it’s spring or summer, make sure the lawn has been freshly cut – and the edges of the lawn are neat. Get a blower to get rid of the clippings, and trim your hedges. If it’s the wintertime, shovel a clear path up from the curb to your house, and sprinkle some rock salt to keep ice from forming. Is it the autumn? Those beautiful red, gold and brown leaves need to go away, so either run a mower over them with a mulcher blade or bag them up.
3. Prepare a resume for your home.
Did you redo the upstairs powder room? Convert that fourth bedroom into a “man cave” complete with all of the latest media technology? Did you plant the back yard grass yourself? Make a list of all of the updates and renovations you have done for the house since you bought it and moved in.
4. Make a resume for the neighborhood as well.
Property values don’t blossom in a vacuum. How are the neighborhood schools? How far away is the nearest playground? How well is it kept? Some pictures of this would be helpful, as well as any other local amenities, such as a homeowner’s association clubhouse, pool or other semi-public gathering area. What is the crime rate like? How does it compare to the rest of the city and the province? All of this information will help the appraiser see your home in the most accurate light.
5. Ask for your own comparative market analysis.
Also known as a CMA, this is a list of recent transactions for homes that are comparable to yours within your community, in terms of size, age and proximity to amenities of similar quality. You can obtain this from any reputable realtor in your area – for no cost. Have this ready for the appraiser so that he knows that you have prepared for this process.
6. Remember the “$500” rule.
For every minor repair that you still haven’t fixed, deduct $500 from your expected appraisal value. This includes things like faucet leaks, vents in need of repair, aging baseboards and the like. These can add up quickly, so if you consider yourself handy, fixing these things ahead of the appraisal can bump up your value significantly.
7. Fix as many problems as you can.
Remember #6? Even if you spend several hundred dollars on the updates, those can add thousands to the appraisal value of your home, and the amount that a private lender will extend to you.
8. Oh, and one more thing…
There’s nothing worse than pet smells. If you have a cat, see if a neighbor or friend will keep it for a few days. Then take the litter box over there, and get some fresh scent in the room where you kept the box. You might not be able to smell it, but the appraiser will. If you have a dog who spends a lot of time indoors, you might consider the same thing. We all love your dog, but the smell is the thing.
If you’re the homeowner requesting the appraisal, remember that if you order it, many lenders won’t accept it and you may need to pay for another. It’s nothing personal – there’s just a lot of fraud that goes on. In a purchase transaction, the buyer should front the cost of the appraisal. The neater your house, the higher your asking price can be – but you probably won’t see a copy of the appraisal. If you are refinancing or taking out and equity loan or a second mortgage, the property owner will pay cover the cost of the appraisal. Finally, remember that the appraiser is really working for the lender – not the borrower or the homeowner, so it is unlikely a copy of the appraisal will be provided. If provided, it is generally on a case-by-case basis with approval from the private lender.
If you requiring a private mortgage, contact Amansad Financial so that we can walk you thru the appraisal and application steps and get you the funding quickly.