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November 2013

Inspection vs. Appraisal

What is the difference between an appraisal and inspection?

Two key components to the home buying process are the appraisal and inspection. Many homebuyers confuse these two functions. Both play important roles. Let’s take a high level look at their differences.

An inspection at the highest level is an examination of a home’s condition-structure and components.  The inspection is conducted a trained and certified inspector. The inspector will produce a detailed report which will help the homebuyer determine if they want to proceed with the sales contract.  Their main goal is the report on the condition of the structure. The report will detail deficiencies, comment on internal pluming, HVAC, examine the structure of property, etc. Report can also comment on mold, pests, etc. Remember, an inspection is for your protection.

On the contrary, an appraisal is an independent evaluation of market value. It is conducted by a trained/licensed professional called an appraiser. This is a 3rd party that does not have any financial stake in the transaction. This function helps to determine market value by evaluating similar sales in an area during a specific timeframe. Report will also detail square footage, construction quality, etc. When a bank is involved they want to confirm that there is sufficient collateral to lend against.


Think value vs. protection!



Answers to commonly asked questions.

Q:What does HARP stand for?

A: Home Affordable Refinance Program

Q:When was the program introduced?

A: 2009

Q:When is it scheduled to end?

A: 12/31/2015

Q: What is the goal of the program?

A: Help borrowers with little or no equity to refinance to lower mortgage liability

Q: Does Fannie Mae or Freddie Mac have to own my loan in order to be eligible for a “HARP” refinance?

A: Yes, loan needs to be owned by Fannie Mae and Freddie Mac where note date is on or before May 31st 2009

Q: Where can I find out whether or not my loan is owned by Fannie Mae or Freddie Mac?

A: http://knowyouroptions.com/loanlookup, http://freddiemac.com/my mortgage

Q: Can you add or remove borrowers?

A: Yes, as long as one of the borrowers remains on the loan

Q: I owe more than my home is worth. If I meet other guidelines, can I still refinance?

A: Yes, as long as borrower meets other program requirements




Weekly Review Week Ending 11/8/13

Bond market was very quiet on Monday. No real news to shift the needle. Buyers still outnumber sellers. The 10-yr closed Monday at a yield of 2.60. Manufacturing reports suggest that the economy is getting stronger.

Market sell off post ISM Manufacturing report. This doesn’t help the taper conversation. Could taper halt sooner rather than later? Time will tell.

GDP and Jobless Claims announced. GDP (Gross Domestic Product) rose at a 2.8% annualized rate, which was much stronger than expected. This was offset by consumer spending (up 1.5%) the smallest increase since 2011.Steady growth, but nothing to do a back flip over.

Week ended with non-farm payrolls coming in much stronger than expected. U.S. economy added 204,000 new jobs in October, crushing estimates as well as rates. Despite this, our unemployment Rate is 7.3%, which increased 1/10th of 1 percent.