Question for the mortgage geeks out there
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From: Melbourne
Question for the mortgage geeks out there
Here's the story. I purchased a townhome last September (7 months ago) and I'm trying to figure out if I have enough equity in the house to take out a home equity loan. Some details. I used a VA loan, so put $0 down, and also financed in closing costs. I did pay the VA funding fee of 4% out of pocket.
Purchase price: $194,900
Loan Amt: $201,000 (creating $6000 of immediate negative equity)
I looked at the current county tax assessment and it is $188,400. A big difference from the market value of the home I know, but the previous house I owned was also undervalued by the county, so no big deal. What I am using from the county's assessment is the annual appreciation using 2002 and 2001 assessment data.
The 2002 county assessment says the home is worth: $188,400
The 2001 county assessment says the home is worth: $159,800
This is an annual appreciation of $28,600, or $2383 per month. I've been in the home for 7 months, so in my thinking the house should have appreciated $16,683.
Take the figure $16,683 and add it to the purchase price of $194,900 and my home should be worth $211,583
My current payoff if roughly $199,000. So I'm estimating my equity in the home to be $12,583.
Does this sound correct? My credit union has told me I need to get an appraisal done in order to determine the current market value, but before I spend a few hundred on the appraisal I want to be sure I'm not just wasting my money.
Thanks for your opinions or advice!
Purchase price: $194,900
Loan Amt: $201,000 (creating $6000 of immediate negative equity)
I looked at the current county tax assessment and it is $188,400. A big difference from the market value of the home I know, but the previous house I owned was also undervalued by the county, so no big deal. What I am using from the county's assessment is the annual appreciation using 2002 and 2001 assessment data.
The 2002 county assessment says the home is worth: $188,400
The 2001 county assessment says the home is worth: $159,800
This is an annual appreciation of $28,600, or $2383 per month. I've been in the home for 7 months, so in my thinking the house should have appreciated $16,683.
Take the figure $16,683 and add it to the purchase price of $194,900 and my home should be worth $211,583
My current payoff if roughly $199,000. So I'm estimating my equity in the home to be $12,583.
Does this sound correct? My credit union has told me I need to get an appraisal done in order to determine the current market value, but before I spend a few hundred on the appraisal I want to be sure I'm not just wasting my money.
Thanks for your opinions or advice!
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Joined: Oct 2000
Posts: 3,504
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From: Boulder
I wouldn't place too much credibility on the calculated average appreciation using county appraised values. County appraisals are often way off, and infrequently changed. They often wait a number of years before reappraising values, and the '01 value could have been at the end of that cycle, accounting for the large jump in '02.
Talk with a realtor, look at some "comps" of actual sale price on recently sold units in the same area. That should be a very good indicator of what the appraised value will be. In fact, that is one of the most common methods for private appraisers to determine value: Look at comps, then +/- your home based on any differences from the comps.
Talk with a realtor, look at some "comps" of actual sale price on recently sold units in the same area. That should be a very good indicator of what the appraised value will be. In fact, that is one of the most common methods for private appraisers to determine value: Look at comps, then +/- your home based on any differences from the comps.
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