We all know that we should do our various check-ups to maintain life, heath and good finances. We go and get our teeth cleaned annually, we may get a physical once a year and we also may have a discussion with our financial advisor. This should also include knowing how much your home is worth even when you are NOT thinking about selling.
Here are just a few reasons why you should know how much your home is worth:
1. Selling a House: If you are selling the house, you absolutely need to know the value of your home. The net proceeds you make after selling a house is your selling price minus the loan balance minus the selling cost. Most likely you already know your loan balance and the selling cost prevailing in your area. The only variable being the selling price. Getting a better idea about your home value is definitely a good first step if you are considering selling in near future.
2. Refinancing: Depending on the loan program, lenders would allow you to borrow a maximum of 75% to 96.5% against your property. While you need to qualify on other credit parameters, equity in the house is one of the more important underwriting criteria. Up to a certain point, the more equity you have the better loan terms you would qualify for. Also, knowing your home value tells you how big a mortgage you can take – whether its refinancing to get a better rate, lower payment or taking a cash-out to satisfy other needs.
3. Making Home Improvements: Home improvements are primarily made for two reasons – making the house more comfortable to live in or preparing the house for sale to fetch a better selling price. You can use the equity you have in your home to make the necessary improvement or renovations you have been thinking about.
4. Getting a Line of Credit: Could you use a line of credit to buy your first investment property, pay off some debit or funds for an emergency expense. With the equity in your home, you can speak with your lender about your eligibility for a cash-out refinance or a HELOC loan (home equity line of credit). Typically, it’s expected for a homeowner to have a minimum of 20%-25% in order to qualify for these types of loans.
5. Being in-the-know: Maybe you have no immediate plans to do any of the above. Still keeping yourself abreast of your home value is a great idea. Situations and plans can change in future, sometime involuntarily. So being in-the-know about the home value will help you take the next steps when you are ready or when life throws a curve ball.
Want to know how much you home is worth? Just send me an email to dee@deesellsdfw.com with your address and I can send over a quick comparative market analysis that gives you a range of what your home is worth.
Looking for a more accurate valuation of your property that provides a detailed overview of your home based on the condition, renovations and other external factors? Schedule your free in-person home valuation here.
Buy
Blog
