Checking My Home Value

6 Great Reasons to Check Your Home’s Value Today Beyond Curiosity

Do you find yourself checking your home’s value online all the time? It is a source of pride and a relief seeing your home naturally appreciate over time. Makes you feel better about the amount of money you spend on upkeep!

However, most homeowners do nothing with this information. Just something to talk about when the subject comes up. I paid X for my house, and now it’s worth Y. Yay!

The more you know about the value of your home, the more power you have to make decisions about your property and it's future sale. Here are 6 productive actions you can take.

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1. Can you ditch private mortgage insurance? Most important thing to keep track of is, it it time to get rid of that PMI on your monthly mortgage payments?

Lenders often require borrowers to purchase private mortgage insurance (PMI) if you made a down payment less than 20% on your house. PMI is usually between .5% and 1% of the purchase price. Meaning on a $600,000 mortgage, your PMI may be $3,000 to $6,000 each year.

So if you, like many people made a 15% down payment or less, your mortgage payment each month most likely includes a PMI cost as well as your taxes, principal, and interest. But, on the date that your principal balance falls below 80% of your home’s original value, meaning you now have 20% equity in your home), you are able to request that your servicer cancels the PMI, as per the Consumer Financial Protection Bureau (CFPB). Once the principal balance lowers to 78% of your home’s original value, the servicer is required to terminate PMI automatically, per the CFPB .

It's best to stay on top of it and get that extra cost removed ASAP. To remove the PMI faster, you can set a goal and reach the 80% threshold by paying more towards you principal every month. However, you can knock off that PMI cost another way, and much faster, if home values are going in your area.

For example: Let's say you bought your home for $450,000 a few years ago. You see that local news indicates that property values are increasing and your home may be worth more now than when you first purchased it. You estimate the current value to be $515,000 based on some early research. If your current mortgage balance is less than $412,000, 80% of $515,000, then you may be able to have the PMI removed. That’s easier to reach than 80% of $450,000, where you would need to pay the principal down to $360,000 to qualify for PMI removal. In this way the rising home values have increased your equity in the property, meaning you are now a lower-risk borrower.

Note, most lenders will require you provide evidence of your home’s updates value to grant a PMI removal request. They will probably require a home appraisal done by a licensed appraiser. The valuation tools you find online or a comparative market analysis won’t suffice. Some lenders accept a broker price opinion (BPO) done by a licensed real estate agent or broker. Ask your loan servicer to find out what options you have, including any other PMI-removal requirements like good payment history or having to remove any junior liens (I.e. second mortgage) on the property.

2. Ensure your homeowners insurance covers the full value of your property

If you learn that your home’s value has increased significantly, it may be a good idea to reevaluate your homeowners insurance coverage.

You may not be covered for the cost of its full value in the event something were to happen. When you purchased your home and drew up the insurance policy, it would have covered at least the amount you paid for your home.

But, a few years, or decades, later and your home has most likely increased quite a bit in value. Or, you could live in a booming real estate market.

In these cases, your original home insurance policy may not be enough anymore. Your insurance company typically has policies in place for general inflation, but if your home has dramatically increased in value, or you’ve made an addition or larger updates, it’s good to discuss your coverage with your home insurance company.

You should take a look

at your insurance's dwelling limit; estimated cost for rebuilding your home as it stands now. Any updates or expansions you've made to you home have changed since the time of purchase. After an appraisal, set up a meeting/call with your insurance provider to refresh your coverage policy.

It’s also worth looking into your policy’s position on replacement cost vs, cash value, which is negotiated as part of the policy.

Cash value means the insurance company pays the depreciated value of an item at the time it is lost or damaged. So they

will not pay you what you paid for it when it was new, for example not the cost of kitchen appliances at time of installation, but for their value today, bringing done the cost for the use they have had over time.

Replacement cost method pays out an amount equal to what you initially paid. Keeping track of the values of items and updates in your home may feel exhausting, but when making a large purchase, like home equipment or new appliances, keep the receipt. When you renegotiate your home’s insurance policy to bring it up to its current value, you can use this evidence to back up your request.

3. Lower your property taxes

You may find the opposite, that your home is currently worth less than you thought. However, this may mean savings in regards to city property taxes.

You are able to appeal the city’s assessment to lower your payment. It may sound like a hassle to appeal the city’s assessment, but consider this: the National Taxpayers Union states that assessors overvalue 60% of properties.

If you feel you’re overpaying on property taxes, based on either informal research or a formal appraisal, you may appeal to your county to lower your taxes. You’ll likely submit a request within a certain timeline, but the process will vary depending on the area.

Your request will include evidence, the best is a formal appraisal, that your home has been over-assessed. You may also includ

e recent home sales data in your area and what your neighbors pay for their property tax. Basically, you have to show the tax office that you are over-paying your property tax compared to the market.

The request might be all you need. However, some counties follow up with a formal hearing, where they may ask some specifics of your property and the research you performed.

4. Update the value on online listing sites to reflect renovations and improvements

Even in the early stages of putting your house for sale on the market, you should start to own your home’s value and history on

line. By claiming your property on sites like Realtor, Zillow, and Redfin, and updating your home’s estimated value online, will change how the home is perceived to better align with its current value.

If you are planning to sell updating these value makes a ton of sense. If a potential buyer is going to look at your home on one of these online sites and see's it priced several thousand, maybe $50,000 under your list price that can be a problem.

By claiming and updating these profiles you also get an opportunity to consider any updates and changes you want to highlight in your upcoming home sale.

5. Learn how much equity you have built up

Understanding equity, which is taking the current market value of your home and subtracting your outstanding mortgage balance, puts puts you in a great position to know more about your finances in general. If you are starting

to think about a move, knowing the value of your home can lead to a much quicker sale timeline. Make sure to factor in the difference between your home's equity and the sale proceeds. Generally the more equity you have in your home, the more money you will make when you sell.

Knowing the amount of equity you have built up also gives you an opportunity to take out a HELOC or Home Equity Line of Credit. After you reach a point when your home's value is more than what you owe, you should be able to borrow against the home with a HELOC which you repay at a fixed interest ra

te. This means you can access financing you need in order to add more value to your property using a strategic home reno or improvement or use the HELOC to invest in additional property.

Keeping track of you home’s value makes the investment work for you.

6. Know when it is the right time to sell your home

Checking your home's value regularly can tell if now is the right year to sell. Even if you’ve seen a major upswing in value you will want to listen to your gut.

You may not want to sell if you're just doing it because your home has gone up in value. If your next move is not planned or set up, whether you will downsize, upsize, or move to a different city or neighborhood, don’t just sell for the sake of selling.

With that said, if you are ready to put a ”Fo

r Sale” sign up for a while, getting an idea your home's value is the key first step in the process. Staying informed of your home’s value, and learning the ideal time to sell in your area, keeps you aware of trends, growth, and slowdowns in the area and particularly for your property.

How can find out your home’s value?

Don't feel pressured to check your home’s value, say, constantly, but I believe looking into it annually helps for sure.

You can use a simple online tool like mine here: https://hmbt.co/mHiRRn. This pulls info many sources to instantly create a continually updated value estimate based on market trends. Bonus, my program above actually tracks your equity as well.

Once your ready to move forward team up w

ith a great agent in your area (I can help with that too) to get a comparative market analysis. Beyond an estimate, this CMA uses data from recent sales in your neighborhood so you will know more clearly idea what buyers would pay for a home like yours. Your agent creating a CMA is normally one of the first stages of a listing consultation and means you’re gearing up to start the home sale process.

If you are planning on putting your home on the market in the next couple of years, or just would really like a single number for peace of mind, having your home appraised can be a great step. A typical licensed home appraisal costs $450-$600 and will help you price your home for sale, may get rid of your PMI, or contest your assessment for property taxes. You definitely do not need an appraisal every year, but from time to time, working with a appraiser might be just what you need.

With an imminent sale or not, knowing more about your home and its value means you can make better informed decisions about it and your future in it.

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