Refinancing in the current market can be problematic. Rarely do homeowners have an accurate market value for their home.
During the qualification process a mortgage broker can help clarify the value of the collateral (your home) and the appraisal requirements for the mortgage. The mortgage broker can do a preliminary investigation of the value of the house. The broker can do this through informal polling of appraisers active in the area. The broker can also pull a Landcor market report. The report will provide for comparables for similar homes that have sold in the area. This preliminary process is important especially if the client is trying to pull out maximum equity out for investment or debt consolidation purposes.
Housing standards and prices can vary tremendously from community to community. how much is my house worth In the Greater Vancouver region of British Columbia it is not unusual for similar types of dwellings to be vastly different in their appraised values.
Canadian lenders have developed fairly specific standards for property types they will refinance based on local housing characteristics. These standards may specify property types (single- or multi-family, condominium, vacation/seasonal, construction, land, etc.) and other features such as minimum square footage, heating and electrical, acreage, zoning restrictions, and flood insurance.
Lenders will obtain an appraisal for the subject property to establish whether the condition and value of the property is sufficient for the loan amount and mortgage product requested. The preliminary analysis by a mortgage broker will ensure that the lenders guidelines for the property and recommended mortgage product are met.
A lender can order this appraisal at application, but most wait until after the underwriter completes an initial review of the debt/income ratios and credit report. By having a mortgage broker determine the value of the property and pre-underwrite the application, the applicants will be saved the cost of an appraisal on a failed application.
The broker will also make the applicants, especially first-time homebuyers, aware of the responsibilities and obligations a mortgage entails for both lender and borrower. The mortgage document the applicants sign at closing includes many covenants regarding lender’s and borrower’s rights and obligations regarding the property, including maintenance, access, defense of title, hazard insurance, taxes, and so forth. The mortgage broker will ensure that the borrower is well aware of the terms and their implications.
The mortgage broker will recommend specific attorneys who specialize in real estate transactions. The applicants should engage an attorney for independent legal advice and counsel for the mortgage refinance.