This article focusses on the main advantages and options available to you for knowing the value and the equity in your property.
1. Selling Your Property
If you are looking to sell your property, you are more than likely also repurchasing. The final proceeds after selling your home is the sales price minus the loan amount and any related selling costs.
You probably know your loan balance and between your real estate agent and conveyancer or solicitor, however, the final piece of your puzzle is knowing the value of your property.
2. Securing a Home Loan is Easier
Banks and financial institutions require assurance that the amount they are lending could be recovered should anything occur for you to not be able to pay the mortgage. A property valuation allows financial institutions understand the amount that they can loan you.
3. Refinancing Application Time is Reduced
By knowing the banks assessment of the value of your home, you can be more confident of the loan products, policies and rates which will apply to you. This will then help determine if refinancing is beneficial in accessing funds or saving on interest.
Generally speaking, the higher the equity in your home, the better loan terms and rates are available.
4. Understanding Your Home Insurance & Premium
Valuating your property allows you to find the right type of insurance and pay the correct premium. Secondly, any claims you make will be expedited by having a reputable property evaluation.
Finally, when it comes to getting home owners' insurance, a valuation is usually required for the reason of risk mitigation to your insurance provider based on your property’s structural integrity.
5. Making Home Improvements
Home improvements normally are occur for two reasons, the first is to make the home more comfortable and the second is to get the property ready for sale and to gain a better sale price.
Understanding the value of your property allows you to determine how much you should be willing to invest in improvements to achieve a desired sales outcome. Conversely you can determine what dollar value would have a negative impact on the net amount earned after sale.
6. Debt Consolidation
There are times where increasing your mortgage to consolidate debt can improve your cash flow or provide savings in interest. Again, the property value and amount of equity available will be a critical factor in determining whether this is achievable or cost effective.
7. Being in the Know
You may not have any plans to buy or sell in the immediate future, however, plans can change very quickly depending on the circumstances (both foreseen and unforeseen). For this reason, it is a great idea to keep abreast and know the value of your property.
About the Authors
Katherin is the Principal of LJ Hooker Home Loans Northern Beaches, Sydney. Katherin manages a team of highly experienced and qualified loan writers with a goal to secure the best loan for clients particular needs, specialising in both residential & commercial finance.
Alex is the Principal of Achieve Finance, leading mortgage advisor, broker and lending specialist located in Brookvale on Sydney's Northern Beaches. Alex's client success is due to his thorough knowledge, extensive experience and focus on developing strong relationships with clients and complementary property and loan industry experts.