Here at My Home, My Sale, we're excited to delve into the world of real estate appraisals—a critical puzzle piece in the realm of property transactions. In this blog post, we'll demystify the intricate process of appraisals and shed light on their pivotal role, especially in the context of financing. Join us on a journey through property valuation as we explore the fascinating interplay between appraised value and sales price.

The Essence of Real Estate Appraisals: A Guide to Unveiling Property Values

Home Equity, Navigating the Hidden Costs & Your True Home Value: Audio Blog My Home, My Sale!

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Homeownership is often associated with the accumulation of wealth through the growth of home equity. Many homeowners believe that their home's value minus the mortgage balance represents their equity. However, this common misconception can lead to unrealistic expectations. In this article, we'll discuss the concept of home equity and shed light on the true financial picture when selling your home.

Defining Home Equity: Home equity is the difference between your home's current market value and the outstanding balance on your mortgage(s). It's a measure of the actual financial stake you have in your property. However, there's more to it than a simple subtraction.

The Illusion of Equity: The formula "estimated home value minus mortgage balance" can be misleading. To understand why, let's look at the various costs and expenses that must be settled when you decide to sell your home.

Breaking Down the Costs:

Mortgage Payoff:  When you sell or refinance your home, your mortgage balance isn't your mortgage balance. This is because mortgage lenders often include interest for the remaining balance up to the date of payoff. Additionally, some loans may carry prepayment penalties.

Example: Let's say your mortgage balance is $200,000. However, to pay it off entirely, you may need $203,500 due to interest and fees.

Home Equity Loan or 2nd Mortgage: If you have a home equity loan or a second mortgage, these need to be paid off, too. Even if there's no outstanding balance, some lenders may charge closeout fees.

Payoff Fees: Your lender may impose fees for processing the final mortgage payment, sometimes referred to as a "payoff request fee."

Closing Costs: Every home sale involves closing costs, which typically amount to about 2% of the home's sale price. These expenses cover various fees, including those charged by the title company and the cost of transferring ownership

Read More on Homeowners Corner https://bit.ly/homeownerscorner

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Home Equity Unveiled Navigating The Hidden Costs And True Value

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