Michigan Refinancing | MI Refinance

This Michigan refinancing tip is going to discuss the importance of determining your property’s estimated value.

One of the first things you want to do when researching your Michigan refinancing options is to accurately determine your property’s value.  One of the reasons this is so important is because your maximum loan amount, will be determined as a percentage of your home’s actual appraised value.  Another reason you’ll want to accurately determine your properties value, before researching your Michigan refinancing options, is so that you’ll know in advance if there may be any issues, relating to the appraised value of your home.  In addition to the previous two reasons, another very important reason to determine an accurate estimation of your property value before researching your Michigan refinancing options, is simply to verify that you will be receiving accurate prequalification’s and/or Michigan refinancing quotes from lenders.

So now that you understand the importance, let’s talk about how to accurately estimate your properties value. While no one can guarantee an appraiser, will come back with an exact number, there are a few basic guidelines that you can use to estimate what your home is worth.

To better understand how to estimate your property’s value, you need to first understand what the real estate appraiser is required to use, when determining your properties appraised value.

Here is a summary of the basic guidelines, most real estate appraisers are required to follow. This is an over simplified summary and is only intended to help you better understand, what the appraisers are looking for, so you can better estimate your home’s value.

The real estate appraiser is required to use a minimum of three sold homes that are similar to the subject property; these sold homes must have been sold within a specific period of time, in most cases within 3 – 6 months, of the date of the appraisal.  The appraiser is to use these sold homes as comparable sales, and use these sold homes to support his opinion of value of the subject property.  The real estate appraiser must find homes that are within specific distance requirements, typically 1 mile radius or less for suburban and urban homes, and 5 miles or less for rural homes.  There are also specific guidelines pertaining to crossing major highways or other specific boundaries that may constitute different value parameters. The homes that the appraiser chooses to use as comparable sold homes must also be similar in features, style, neighborhood, construction, age, number of bedrooms, number of bathrooms, etc.  The appraisers are allowed to make adjustments to the sales prices, for homes that are slightly superior or inferior, based on the specific features, within specific tolerances.

One very common concern among many Michigan refinancing clients, is how the foreclosed homes in their neighborhood, may affect their appraised value. Distressed home sales, such as foreclosures, are not required to be used by appraisers. However, if those are the only sold homes, or the most similar sold homes to the subject property, many times it makes sense for the appraiser to include them as comparable sales.

So if you have 3 homes in your neighborhood, which were similar to yours, and they sold for $200,000 to $220,000, within the last 6 months, then it is reasonable to assume that your home will probably appraise, near $200,000 to $220,000, depending on the features and how they compare.  There are several resources available, to help you find the sold home data, and I will be happy to share them with you if you contact me.

So before you can really begin getting accurate Michigan refinancing quotes, you’ll first want to take a look at homes in you neighborhood, and review the prices which they have sold for.  This will help you estimate what value your home is currently worth in the eyes of a real estate appraiser.

I specialize in helping people with Michigan refinancing, and I would be happy to answer any questions you may have.   Please feel free to contact me, or post a comment here.

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