mortgage lender is involved. When it comes to closing a financial transaction involving real estate both the seller and the buyer depend on the appraisers evaluation. This procedure is meant to protect the buyer — as well as the bank that offers the mortgage loan — from purchasing an overestimated and overpriced piece of real estate. Property appraisers aren’t the same as property inspectors. The difference between an appraiser and an inspector is that the former will look only for obvious issues, while the latter checks, in a more detailed manner, items such as the plumbing or the air conditioning system. The appraisal report is required by the bank, and the cost is included in the mortgage costs. The appraisal expert evaluates the property using one of these two methods: the sales comparison approach, by comparing your home with other similar ones that were sold in the area, or the cost approach, used mainly for new construction — a method that evaluates the cost of replacing the structure of the home.
VALUE OF PREPAYING YOUR MORTGAGE
It’s a great idea to prepay your mortgage if you can (unless you have a ridiculously low interest rate such as the low 2.50% rates in 2021 and 2022). By doing so, you can reduce the cost of interest charged and save thousands of dollars in the long term. To prepay the mortgage means that you pay the amount you owe to the lender before it is due. To do so, it’s important to understand some of the most popular methods of doing this. Some people decide to pay a monthly sum in addition to each mortgage payment. This amount gets applied to the principal balance of the loan (not the interest), and doing so consistently can save you a small fortune in the long run. For instance, let's say your total mortgage payment is $1,500.00 per month. If you sent in an additional $100.00 with each payment you will be reducing
128
Powered by FlippingBook