justifies the loan amount.
How Appraisals Work:
• Conducted by a licensed appraiser. • Methods include comparing recent sales of similar properties or estimating the cost to rebuild the home. • The appraisal fee is usually included in your closing costs. If the appraised value is lower than your offer, you may need to renegotiate the price or bring additional funds to the table to cover the difference.
Prepaying Your Mortgage: Is It Worth It?
Prepaying your mortgage can save you thousands in interest over the life of the loan. This involves paying extra toward your principal balance, reducing the amount on which interest is calculated.
Popular Prepayment Strategies:
1. Add an extra payment each year by dividing your monthly payment by 12 and adding that amount to each payment. 2. Pay an additional fixed amount toward the principal monthly. 3. Use windfalls, like tax refunds or bonuses, to make lump-sum payments. Before prepaying, check your mortgage agreement for prepayment penalties, which can negate the financial benefits.
Avoiding Common Closing Pitfalls
Closing can be disrupted by seemingly minor missteps. Here’s how to avoid them:
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