Embrace Home Loans- OPEN HOUSE TONIGHT!!!





Please join us tonight at our Open House, it is shaping up to be a great event and you'll even get a gift bag! Just send me an email and I will add you to our guest list or comment directly on this post. See you there!

2010 GCAAR Fest Was a Success!

Embrace Home Loans was a sponsor at the Greater Capital Area Association of REALTORS® and the turn-out was wonderful. It was so great to talk to prospective clients, colleagues, and old friends. I look forward to next year's GCAAR Fest, which should be called the GCAAR "Feast", because the food was abundant and delicious! Great job Embrace team-members for a successful and "fruitful!" day of hard work!

GCAAR 2010 REALTOR® Fest

N E W S

Don't miss this year's REALTOR^® Fest

October 4, 2010
BETHESDA NORTH MARRIOTT5701 Marinelli Road
Bethesda, Maryland 20852

Formerly known as the Capital Area Real Estate Summit.

A day of education and networking with dynamic instructors, exhibitors, and relevant courses designed to take your career to the next level! You will receive up to 9 hours of continuing education credits from Maryland, DC, and VA.

Online registration is now closed. You may register onsite Monday.
SEE YOU THERE!

Real Estate Appraisals 101

Today we hear more and more about appraisals as part of the real estate process. Tough markets, like the one in which we find ourselves today, bring the subject to the forefront more so than in times of booming sales and bidding wars.

In fact, these days, more often than not appraisals can be one of the biggest roadblocks to a successful purchase – or sale – of a home. Why is that? What makes an appraisal so critical? And while we're at it, just exactly goes into an appraisal?


Simply put, an appraisal is an informed estimate of the value of a property. It's the number lenders refer to when deciding whether, or not to approve loans. It could be said that appraisals are meant to help buyers and lenders avoid potentially bad investments. Here's what you should know about how it works.


The seller of a home will probably have a real estate agent, who will use a CMA, or comparative market analysis, to determine a realistic asking price for the home. While the information is useful, the lender will look to a specialized, local third-party professional to provide the "official" home valuation report. And that professional is... you guessed it ...the appraiser.


You see, arriving at that final appraisal figure is no easy task -- to be accurate, an appraiser needs an educated, trained perspective and understanding of all of factors that have to be carefully weighed with respect to the state of the real estate market in that specific area.


For example, major factors of the appraisal have more to do with the neighborhood than the home itself:

•The type of area: Is it part of a development? Or is it stand alone acreage?

•The recent sales prices of comparable homes located nearby

•The average sales time of this type of property in that area

•The proximity to desirable schools and public facilities


This information can be found by various sources -- from driving down the street and observing the surroundings, to gathering information at the local tax assessor's office and county courthouses, through MLSs (multiple listing services), by conducting interviews and more.


It's a lot to consider, so you can see how having experience valuating properties within a given neighborhood is critical to arriving at an accurate appraisal.


But what about the property itself?


The appraiser will tour the home as a potential buyer would tour the home. Clean, updated, well-maintained homes will appeal more to buyers – and chances are, they'll appeal more to the appraiser as well.


First impressions aside, for his analysis the appraiser will generally consider only permanent fixtures and real property -- that is, property that's permanently dug into, or set upon, land. So, a building is real property -- a couch is not. Added touches, like sconces or other added fixtures, are nice but do not count toward the appraiser's assessment.


After taking stock of the real property, the appraiser estimates the square footage of the home. Typically, the more space in a home, the better. GLA, or gross living area, is calculated by measuring the exterior of the home. The appraiser will note the GLA and then will look to calculate actual living area space. So that means he deducts the measurements of non-living areas, such as garages or covered porches. (Although, surprisingly, finished basements are calculated separately from the above-ground GLA.)


All said and done, depending on the size of the property, an appraisal should take anywhere from 15 minutes to three hours.


But don't ask the appraiser for the value of the property while he's still there - he won't have it yet. After the walk-through, it's back to the office for some number crunching. Buyers (and lenders) can typically expect a report within a few business days.

And who pays for the appraisal? Although the Lender arranges for the Appraisal, the buyer pays the bill. For an average home, that's usually around $300 to $500.

15 Year Fixed Rate Loan...Is it Right for Me?

A 15-Year Fixed Rate loan works well for borrowers who are nearing retirement and want to be debt-free when they get there. Because payments in a 15-year scenario are amortized over half the length of a 30-Year Fixed Rate loan, the monthly payments will be significantly higher in comparison. This is an important factor to consider before committing to a 15-year loan. However, the interest rate on a 15-Year Fixed Rate loan will be lower for the same reason - financing for 15 years costs much less than financing for 30 years.

If a borrower is 50 years old and would like to be debt-free when retiring at age 65, then a 15-Year Fixed Rate loan will allow the borrower to meet that goal as far as their mortgage is concerned. However, if there is any question as to whether the borrower will be able to commit to the higher monthly payment, the alternative is to take a 30-Year Fixed Rate mortgage and make pre-payments with some consistency. If the borrower has the discipline to make those extra payments whenever possible, he or she can still attempt to meet the same goal.

I prefer to educate my borrowers so they can compare the benefits of each program and have the opportunity to review loan options with their financial advisors.