Which Value Do You Use?

What your home is worth depends on why you ask the question. It could be one value based on a purchase or sale and an entirely different value for insurance purposes.

Fair market value is the price a buyer and seller can agree upon assuming both are knowledgeable, willing and unpressured by extraordinary events. This value is generally indicated by the comparable market analysis done by real estate professionals.

Insured value is determined for the proper insurance coverage. Replacement cost could actually exceed the cost of new construction when additional expenses are incurred for demolition and the added complexities of matching existing construction.

Homeowners are generally more familiar with their home’s market value. Since it can be lower than the replacement cost, owners should review the insured value with their property insurance agents periodically. Under-insuring could invoke a co-insurance clause that may limit the settlement and increase your out of pocket expenses.

Is Now the Right Time to Upgrade a Home?

Headlines touted the infamous line once again Friday that mortgage rates are at historic lows, inciting the bIf it all adds up it could be a great time to buy a new home if it makes financial senseurning question, “Is now the right time to upgrade my home to a bigger, better one?” Affordability is at an all-time high at many places throughout the Country and if one has the ability to acquire and secure a mortgage, the cost of buying a home is better than it has been in years. That being said, wanting to move up and being able to move up are two different things, and it is a great time to take a hard, honest look at what makes sense for your particular situation.

Finances. If your current mortgage is a stretch financially then you should hardly consider taking on more. If you have a solid steady income and can afford more, it is a great time to start looking for a housing upgrade. Affordability is seen as housing costs taking up 30% of a household’s monthly income, if a new mortgage will keep you there a new home makes sense.

Current home. Do you need to sell your current home to buy a new one? If you can hold on to your current home and rent it until the market is fully recovered, your investment can be sold at a bigger profit. This is especially wise if your current home can be rented for more than the mortgage payment every month.

It is not a wise idea to upgrade to a new home if it does not make financial sense for your future. If it does make financial sense there could never be a better time to jump into a new home. It is a great time to discuss a possible move with a financial advisor or a qualified real estate professional.

SourcedFrom Sourced from: Kinetic Content Library