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A home’s fair market value is the price it would sell for in a perfectly logical world—one where both buyer and seller are acting of their own free will (in other words, they aren’t desperate to strike a deal), are reasonably aware of a home’s good and bad points, and could just as easily choose a different house that suits their needs better.

In such a world, market forces reign. Buyers and sellers negotiate up or down from their various positions and agree on a home’s price. Deal done. All is good!

Fair market value vs. market value

A home’s fair market value is similar to a home’s market value—what it would fetch on the open market—but is used in specialized circumstances where the concept of fairness is important to evoke so that the home’s price carries more weight.

“FMV is typically brought into the real estate conversation whenever a sales price is being scrutinized,” says Robert Pellegrini, a real estate lawyer in Boston. Here are some circumstances where you’ll likely hear about a home’s fair market value:

Property tax assessments.
Home insurance claims—if a house suffers damage from a fire, flood, or other disaster, the insurer will look to FMV to determine compensation.
Refinancing a home loan—the bank will typically use a home’s fair market value as a measure of how much the home is worth to determine refinancing terms.
Estate sales—if the homeowner has died and a relative wants to purchase the property, the court will look at FMV to determine a price.
If the government wants to “buy out” a homeowner to use that land to, say, build a highway or school, the owner is typically entitled to be compensated at fair market value.
Short sale—this is when a home is worth less than the owners owe on their mortgage. In this case, the owners must persuade the lender to let them sell the home for some amount that is less than the balance of the home loan they still owe. “When a bank does allow this, the bank wants to make sure that the short-selling purchase price is at least FMV for the property,” says Pellegrini. Because, of course, no one likes a total loss!

How is fair market value determined?

“Let’s be clear about one thing: There is no exact mathematical formula that calculates fair market value,” says mortgage lender Michael Fema, CEO of Get a Rate. “Information is key, and the best way to obtain a home’s true FMV is … by hiring a professional licensed appraiser.”

To determine fair market value, a licensed appraiser gathers and measures the qualities of a home, such as its size, condition, neighborhood, and other factors. This information is used by lenders, attorneys, insurance companies, and other agencies to help determine a fair price.

All that said, no one ever proclaimed that life (or the housing market) is fair—which is why homes may often sell for an amount far different from this figure.

If, say, a family is desperate to buy a certain home because it’s in a coveted school district and their twins are entering kindergarten that fall, they might be willing to pay substantially over a home’s fair market value. Or if a home seller has fallen ill and has to sell quickly to cover medical bills, he or she might be willing to settle for less than a home’s FMV.

But in an ideal world, fair market value is the benchmark, and probably the closest number to what a home is truly worth.

At its heart, fair market value helps prevent home sellers and buyers from being taken advantage of, and is a good thing for both parties. And it’s worth knowing the term in case you feel like someone’s stance on a home’s price is off base. Just point out, “I think that’s pretty far above/below this home’s fair market value.” Who knows? If you’re right, this argument could persuade the seller or buyer to budge.

POSTED BY: KEVIN DECKER AUGUST 15, 2016

Having travelled to every state in our fair union and visited cities from the big to the small, few cities personify Americana more than Hendersonville NC. From its beautiful location in the Smoky Mountains to its quaint downtown, the city is the living image of what people think when picturing a truly American city.

When you arrive in Hendersonville, you are struck by how the city has organically grown over the years and they embrace and preserve their history while still pushing forward into the future. The city personifies  the word community, many cities talk about community but Hendersonville walks the walk.

However, a city by itself is just a collection streets, buildings and houses, it is the people that make the difference. Everyone likes to feel like they belong and are welcome and this feeling is alive and well in Hendersonville NC. When you walk into any business, whether its Jongo Java, McFarlan Bake Shop, Fatz Cafe or Sycamore Cycles you feel like they have known you for years, even if it’s your first time.

From a visitor standpoint, you get the feeling that you are tucked away atop the mountain while in Hendersonville and the problems of the world are far away. Take a drive on the blue ridge parkway, attend the Apple Festival and take in the beauty of the mountains. Just sit in downtown and watch the buzz, have lunch at Hannah Flannigans, listen to music on Main and peruse the multitude of antique shops.

Out of all of the cities I have traveled to, driven through or stopped in, Hendersonville NC is at the top of the list of cities that I didn’t want to leave. If you have not been to Hendersonville NC, take the time, plan a trip and learn to love the city the way I have. I promise you won’t be disappointed.

HendersonvilleDowntown 

 

There’s a ton of terrific, true, and essential home improvement advice out there. “Measure twice, cut once” comes to mind. Ditto “Pick remodeling projects with the best ROI.” But “Screw contractors, do it all yourself”? Not so much.

Bottom line: There’s some very, very bad advice out there, fighting for attention along with the good. And much of this misdirection may actually be trotted out by friends and family who mean well. Unfortunately, good intentions won’t keep your home from becoming seriously messed up.

So before you pick up a hammer, make sure to check this list of the worst home renovation advice you might be tempted to try. Then slowly back away from the toolkit and think twice! Maybe even three times.
See more here.

 

What’s more terrifying than global warming, national economic collapse, or a zombie apocalypse? For many of us, it’s math—especially the type involved in securing a mortgage to buy a home.

But mortgage math doesn’t have to be intimidating. Though a home loan does indeed involve a few equations, it’s fairly easy to break it all down into the kind of simple arithmetic every home buyer can understand and, more important, needs to know.

Take note: The latest figures available show the median home costs about $220,000, so we’ll use that figure as a base for our calculations. Other figures we’ll use: an average family’s annual salary is about $54,000 and it carries $7,630 in debt.

How much do you need for a down payment?

Though you can contribute as little as 3.5% of a home’s value for a down payment, lenders consider an ideal down payment to be 20% of a home’s total price. So here’s the math on that for the average-priced home:

20% of $220,000 = $44,000 down payment

This would leave $176,000—the amount a home buyer will need for the mortgage.

Another reason to aim for 20% down: You’ll avoid paying private mortgage insurance, which is typically required under that threshold. And that will cost you about $1,000 per year, says David Bakke of Money Crashers.

(Still, if that hefty 20% is an unattainable goal, at least try to put down 10% for a significantly better interest rate than you’d get with 3.5%.)

How much will a mortgage cost per month?

A mortgage can be paid off in numerous ways, but one of the most typical is to stretch those payments out over 30 years—that way, you break it down into bite-size pieces. Building off the numbers above, here’s how much your average mortgage would cost per month:

$176,000 at 4% interest rate = $840.25 monthly payment

Keep in mind, this monthly bill does not include property taxes, home insurance, HOA dues, or other home-related maintenance fees, which vary by area but are in the ballpark of a few hundred per year for a home at this price.

Also note that the longer you stretch out your mortgage payments, the more you’ll end up paying in interest. Over 30 years, the total you’ll fork over in interest amounts to $302,490.33!

But there are ways to lower the amount you pay in interest—like paying off your loan faster. Finish in 15 years, and you’ll end up paying only $234,333.13 in interest. Granted, for a 15-year loan you’ll have to cough up more per month—$1,301.85 instead of $840.25. But the upside is you’ll save a sizable chunk in interest over the life of your loan, and be mortgage-free in half the time. So if you can afford it, it’s an option worth considering.

How much mortgage can I afford?

Of course, you’ll want to buy a home that you can comfortably pay for. So, how do you know how much is too much, too little, or just right? The way they do this is by determining your debt-to-income ratio.

For most conventional loans, experts say you’ll want your DTI ratio lower than 36%. That means your debts don’t exceed more than about one-third of your income. But how does a mortgage fit into that?

To figure that out, start with your gross income (what you take home before taxes). Let’s say your family pulls in the U.S. average, which is $54,000 per year. Divide that over 12 months to get your monthly income.

$54,000 / 12 months = $4,500 income per month

Then total up your debts—including what you owe on credit cards, auto insurance, and college loans. Remember, debt includes only items that appear on a credit report, not recurring expenses like groceries or phone bills. Since the average American carries an average debt of $7,630 per year, we’ll use that number. Divide that by 12 to get your monthly debt:

$7,630 (average debt) / 12 months = $636 debt per month

Now, add that monthly debt to your average monthly mortgage payment of $840.25 to get your total debt owed per month:

$636 debt + $840.25 mortgage = $1,476.25 debt per month

Next, divide your monthly debts by your monthly income

$1,476.25 monthly debt / $4,500 monthly income = 33% DTI

In this scenario, the debt-to-income ratio is 33%—just below the 36% cutoff. Which means this mortgage would most likely pass the bank’s muster with flying colors! Calculate your own DTI here.

See? Not so hard. Granted, this is a simplified version of mortgage math; your own results will depend on your income, debts, and other circumstances. But if there’s one thing we hope you take away from this, it’s that mortgages are nothing to fear—a little knowledge goes a long way. And if you get stuck, there’s no need to copy from your neighbor’s paper, since we have this handy mortgage calculator to help you whiz through these permutations with ease.

11 things to see, do and eat in Hendersonville, less than 2 hours from Charlotte!

View article here.