Selling or refinancing your home? You may have a problem

By Heather Sullivan - bio | email

RICHMOND, VA (WWBT) - If you're looking to sell or refinance your home, you may have a problem. Assessments on home values across the area are down. For some, that means owing more on their homes than they're worth.

Homes are most people's biggest investments. When the value goes down, it can prevent you from selling the home, refinancing, or could even cost you your line of equity.

The Hanover County assessment of the Watkins' home just went down, Mike Watkins tells us. "Our equity credit line was cut off because of the assessed value that they gave was much lower than appraisal we used through our mortgage company."

Now the Watkins say they must pay for the equity line of credit, "But we no longer have access to the funds."

In Hanover, real estate has collectively lost nearly $200 million in value. County assessments, based on sales prices through October, are down 1.5 percent. The average price of homes that sold dropped from $347,000 to $271,000. And its not just Hanover. Property assessments, and therefore property tax revenue, are down across greater Richmond.

Said Ron Waddell, mortgage broker with WestStar Mortgage, Inc., "Many home buyers are at a point where they owe more than where the value is. Unfortunately, at that point lenders are unable to give any kind of refinance options."

When the current value of a home is assessed lower or even below the amount borrowed for the home, sellers end up selling for less or taking a loss, which can hurt their credit. And homeowners who want to refinance at current low rates either can't or may have pay mortgage insurance. Explained Waddell, "Mortgage insurance is required when you have less equity in your home."

So what can you do? Waddell says being able to refinance will depend on how much you owe on the home. "If what you owe is 95 percent to 97 percent of the home's value, then you might be able to refinance."

He says if you can wait to sell your home, wait until prices rise. If not, you can appeal the assessment, if your home is like the Watkins' and the county assessment is different than the lender's assessment. Said Watkins, "The county may use one method, but lenders may use another method."

Here are links to local assessment offices and information on how to appeal home assessments:



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