So, part of my job is doing home equity loans for customers. For any not in the know, home equity loans are money borrowed against whatever value of your current home that remains after subtracting out your mortgage balance.
A big part of how much a customer can borrow, then, is dependent on what the house is worth.
NOT what the customer thinks it should be worth. NOT what the house was worth back before five neighbors foreclosed and sold off their houses at a tenth of the prior value.
Not even what the house might be worth, maybe, after all your construction dreams are completed. (Speaking of which: the amount of money you spend on fixing up your house is in NO WAY equal to the increase in value. Some major repairs will show up as a wash on an appraisal... little things like them expecting that the roof should be solid and in good condition, so if you get a brand new shiny roof, the appraisers don't really care... unless of course the prior appraisal was looking at the house with a big hole in the roof.)
We're strict in that we won't even allow projected value increase using current work orders. You want a home equity to add a garage to your house? Well, the value needs to be there before the garage is added on. We're not looking at the future, only now.
As-is. This is what it means.
It also means that when I warn you not to tear up your kitchen to the floorboards for the work you are intending until AFTER the inspector gets there, because they WILL mark off the value for having an unusable kitchen I really do mean it.
A big part of how much a customer can borrow, then, is dependent on what the house is worth.
NOT what the customer thinks it should be worth. NOT what the house was worth back before five neighbors foreclosed and sold off their houses at a tenth of the prior value.
Not even what the house might be worth, maybe, after all your construction dreams are completed. (Speaking of which: the amount of money you spend on fixing up your house is in NO WAY equal to the increase in value. Some major repairs will show up as a wash on an appraisal... little things like them expecting that the roof should be solid and in good condition, so if you get a brand new shiny roof, the appraisers don't really care... unless of course the prior appraisal was looking at the house with a big hole in the roof.)
We're strict in that we won't even allow projected value increase using current work orders. You want a home equity to add a garage to your house? Well, the value needs to be there before the garage is added on. We're not looking at the future, only now.
As-is. This is what it means.
It also means that when I warn you not to tear up your kitchen to the floorboards for the work you are intending until AFTER the inspector gets there, because they WILL mark off the value for having an unusable kitchen I really do mean it.
Comment