Your Guide to the Home Appraisal

You’ve found your dream home and now it’s time to cross all your T’s and dot all your I’s before it’s all your own. And one of the first items on your closing checklist the home appraisal. So, what exactly is that?

The home appraisal is essentially a value assessment of the home and property. It is conducted by a certified third party and is used to determine whether the home is priced appropriately.

During a home appraisal, the appraiser conducts a complete visual inspection of the interior and exterior of the home. He or she factors in a variety of things, including the home’s floor plan functionality, condition, location, school district, fixtures, lot size, and more. An upward adjustment is generally made if the home has a deck, a view, or a large yard. The appraiser will also compare the home to several similar homes that were sold within the last six months in the area.

The final report must include a street map showing the property and the ones’ compared, photographs of the interior and exterior, an explanation on how the square footage was calculated, market sales data, public land records, and more.

After it is complete, the lender uses the information found to ensure that the property is worth the amount they are investing. This is a safe-guard for the lender as the home acts as collateral for the mortgage. If the buyer defaults on the mortgage and goes into foreclosure, the lender generally sells the home to recover the money borrowed.

Fed Stands Firm: No Interest Changes This Month

As expected, the Federal Reserve made no interest-rate-change decisions at its meeting this week, and it didn’t signal a propensity for changes in early 2020.

WASHINGTON – The Federal Reserve made no changes to its benchmark interest rate, according to an announcement released when its meeting ended on Wednesday. Federal interest rate changes, either up or down, can directly impact adjustable-rate mortgages and, indirectly, fixed-rate mortgages.

In addition, nothing in the Fed’s accompanying statement suggests that further interest rate cuts are on the horizon, assuming nothing major in the economy changes. That likely means little change early next year, though economists are split on whether another interest rate cut may occur later in 2020.

Fed Chairman Jerome Powell once worried that a robust job market would push consumer prices higher than the 2% level. However, inflation appears stable even with almost full employment. The current unemployment rate is at 3.5% – a 50-year low – but inflation was well under the 2% benchmark in October when it stood at 1.3%.

Economists usually scour the Fed statement to look for signs of intention – whether the Fed is leaning toward lowering or raising rates at its next meeting. However, the latest statement appears to suggest neither, at least over the short term.

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