Property Appraisals for Home Equity Loans
Home Equity Loans are a potent means of achieving your financial ambitions because they allow you to gain access to large sums of capital via loans, by securing your home as collateral. Whether you are looking to purchase an investment property, are in need of capital for medical purposes or for the payment of tuition fee, Home Equity Loans can help you raise the money you need.
Property is perhaps the most capricious of commodity investments for there are no two properties even in the same geographic area, zip code, indeed street, that will be valued at exactly the same value. The condition of the property, the interior, the location, the fixtures and fittings which are contained within it will affect its final market value.
So many different factors to be aware of and duly weigh up, so many numbers to calculate and process - It is enough to make your head spin, isn't it? This is where an appraisal company really comes in handy, as these companies have extensive professional experience with effectively appraising a home.
Role of an Appraisal Company
Just what does an appraisal company do, especially in the context of Home Equity Loans? In simple terms, an appraisal company will assess a property and provide an estimate as to how much it happens to be worth and this figure is referred to as the "market value."
Please note that whilst most residential properties will be assessed and referred to with reference to the market value, the following are examples of other calculated values that the appraisal company may use:
Value in use: This refers to the value that the property will provide to a specific purchaser, and so this maybe significant if you are trying to attract a particular type of purchaser.
Investment value: This refers to the value that the property will provider to a specific investor.
Insurable value: This refers to the value of heritable property which has been protected by the terms of an insurance policy.
Each of these different classifications of values is significant. Let us take a look at how these valuations can be used:
- The insurable value may be used in situations where there is partial or total destruction of the property, or where there is a burglary of the plenishings therein contained. In relation to Home Equity Loans, given that the home itself is collateral, the total destruction of the property would deny the commercial lender their security. Therefore, insurable value is a crucial figure to acquire.
- Value in use and investment value may be used in the event that the homeowner defaults on their Home Equity Loans resulting in the bank then exercising their legal right of foreclosure of the property. There is no legal obligation upon the bank to sell the repossessed property, and if the investment value is high enough, the bank may decide to keep it.
Appraising is an essential business service, and many banks will insist on an appraisal report being conducted. At "Appraisal California", with our extensive experience, proven track record and sound knowledge base, we are more than equipped to deal with any and all problems that may arise.