Home Appraisal Guide

One of the most important aspects of getting a mortgage is the appraisal.

Home appraisal guide

Mortgage appraisal— a professional opinion of a property’s market value, determined by a licensed appraiser.

An appraiser will visit the property and examine the interior and exterior of the property. They will take pictures, measure rooms, note upgrades and examine other aspects of the house for functionality. Once they finish looking at the property, they will research similar homes through various assessor databases and local real estate portals.

Appraisal guidelines protect consumers. Lenders are required to give you copies of all appraisal reports and other written valuations. If you have questions, talk to your lender. Open and honest communication will help you better understand the mortgage process.

May I choose my appraiser?

No. Your lender must request the order. Lenders, realtors and appraisers must follow Appraiser Independence requirements to ensure the appraisal is fair. You can read the guidelines on Fannie Mae’s website, fanniemae.com.

Why are appraisals important?

An appraisal is important because it provides you with valuable information about the property so, as a buyer, you do not pay more than the home is actually worth. It can also play a big role in determining the amount of money you may borrow when purchasing or refinancing your home.

I got a home inspection; do I still need an appraisal?

Yes. The home inspection does not replace an appraisal and vice versa. A home inspection is an in-depth, objective examination of the physical structure and major components of a home. A home inspector will not determine the value of the home; they help you assess potential risks that may affect your investment.

How long before I receive my appraisal?

Appraisals can take anywhere from a few days to a few weeks to complete due to many variables that may affect the time frame. For instance, during the peak of real estate season, it may take longer due to the backlog of requests. Rural, luxury or complex properties also take more time to complete based upon availability of comparable sales data.

We are to here to help, even if you are not an RCB Bank customer. Connect with a local RCB Bank lender to get answers to your lending questions.

Invest in yourself. RCBbank.com/GetFit

Opinions expressed above are the personal opinions of the author and meant for generic illustration purposes only. For specific questions regarding your personal lending needs, please call RCB Bank at 855-BANK-RCB, With approved credit. Some restrictions apply. RCB Bank is an Equal Housing Lender and Member FDIC. RCB Bank NMLS #798151. Kenneth Wohl NMLS #453934.

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Rural Development Home Loan Advantage

Get$Fit Tip: Know all your financing options before you start home shopping.

Rural Neighborhood

USDA Rural Loan Requirements

If you feel like homeownership may be out of reach because you don’t have a large down payment, look into the U.S. Department of Agriculture Rural Development loan (RD) program, which provides up to 100 percent financing to qualified households in eligible areas.

Fun fact: Rural America includes 72 percent of the nation’s land mass, according to the USDA RD 2017 Performance Report.

Rural Development Loan Advantages

100% financing

Rural Development loans may only require you to pay closing costs. The majority of other loan programs may require at least 3 percent down.

Lower Interest Rate

Because Rural Development loans are backed by the government, they typically are lower interest rate loans than most conventional loans.

Keep in mind, interest rates vary daily and depend on a number of factors, such as loan amount, credit score and rate lock.

Seller Concessions

Rural Development loans allow the seller to contribute up to 6 percent of your closing costs, which may cover your out of pocket needs entirely.

Mortgage Insurance Reduction

Most loans require mortgage insurance (PMI) if you pay less than a 20 percent down payment. PMI covers the loan in case of default and may require an upfront fee and/or is included in your monthly loan payment. With a Rural Development loan you may be able to finance the upfront portion and receive a discounted rate on the monthly fee.

Talk to a lender to explore your options, and to find out if you qualify for a Rural Development loan.

Lenders at RCB Bank are happy to help answer questions even if you are not a customer. Give us a call or visit our online Mortgage Center.

Opinions expressed above are the personal opinions of Alex Penny and meant for generic illustration purposes only. For specific questions regarding your personal lending needs, please call RCB Bank at 855-BANK-RCB, RCB Bank is an Equal Housing Lender and member FDIC. RCB Bank NMLS #798151. Alex Penny NMLS #1535836.
Source: USDA, https://www.rd.usda.gov/
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Guide to defining your second home

Vacation home

When it comes to buying a second home, understanding how to define the property will help you better understand your mortgage options.

Let’s go over the basic home types defined by Fannie Mae.

Principle Residence, a property the borrower occupies as his or her primary residence.

Second Home, a property that must be occupied by the borrower for some part of the year, restricted to residences suitable for year-round occupancy. Borrower must have exclusive control of the property, must not be rental property or timeshare, and cannot be subject to any agreements that give management firm control over the occupancy of the property.

Investment Property, a property owned but not occupied by the borrower.

The property types seem straightforward, but here are a couple examples of when it gets tricky.

College homes

Many parents planning to purchase a home for their kids while they attend college will often apply for a second home mortgage.

If a home is considered as someone’s primary residence, regardless if that person (or student) is obligated or not on the loan, the home cannot be someone else’s secondary. In this case, the college home is an investment property.

Vacation homes

Another area of confusion are timeshares or homes managed by a management group, e.g., rental company. Most often, these do not qualify for conventional financing.

Your vacation home may qualify as a second home if it is in your full control and not generating income.
Remember, second homes are a second residence for the borrower to enjoy or use when not occupying their primary residence.

If you plan to rent the property while you are not using it, it may not qualify as a second home.

If you’re planning to purchase a vacation home or second property speak to a lender before you start the mortgage process.

The more you know about your loan options and your individual qualifications, the more satisfying your homebuying experience is.

Lenders at RCB Bank are happy to help answer questions even if you are not a customer. Give us a call or visit our online Mortgage Center.

Opinions expressed above are the personal opinions of the author and meant for generic illustration purposes only.  RCB Bank is an Equal Housing Lender and member FDIC. RCB Bank NMLS #798151. Kenneth Wohl NMLS #453934. 
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How new tax law affects mortgage deductions

W-4 tax sheet with money and house on it

You’ve likely heard about the new tax plan and the changes coming to our tax code. I am not a certified public accountant (CPA) and cannot speak to how this may directly affect you individually, but I can share how the changes may affect your mortgage tax deduction.

One benefit of home ownership is being able to deduct your property taxes and mortgage interest on your income taxes.

For example, let us say you buy a home for $275,000 and the taxable value of the home is 1.25 percent of the sales price. On a mortgage at 80 percent loan-to-value accruing interest at 4 percent, you can expect to pay around $8,700 in interest and $3,400 in taxes, a total of $12,100, the first year. This amount will decrease each year as you pay down your principal.

Under the current tax code, the standard deduction is $6,350 for single filers and $12,700 for married filing jointly. If you had no other deductions, it would benefit you to itemize if you were single but not if you were married filing jointly.

The proposed tax plan will increase the standard deduction for single filers to $12,500 and married filing jointly to $24,000.

Using our example, the $12,100 mortgage deduction falls below the standard deduction for both single and married filing jointly.

Owning a home is an American dream for many people, and there are benefits to home ownership other than a tax break. Before you decide to purchase, be sure to look at the full picture of ownership.

With many current deductions and potential phase-outs of those deductions if the new tax proposal passes, it’s important to do your homework. Talk with your CPA and ask them to show you a future tax plan based on the proposed law.

When you decide to buy or refinance, first talk to a local lender. The more knowledge you have about the mortgage process, available loan options and your individual qualifications, the more satisfying your home buying experience will be.

Lenders at RCB Bank are happy to help answer questions even if you are not a customer. Give us a call or visit our online Mortgage Center.

Opinions expressed above are the personal opinions of Kenneth Wohl and meant for generic illustration purposes only.  For specific questions regarding your personal lending needs, please call RCB Bank at 855-BANK-RCB, RCB Bank is an Equal Housing Lender and member FDIC. RCB Bank NMLS #798151. Kenneth Wohl NMLS #453934.
Sources: taxpolicycenter.org and irs.gov
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