Paper Example on Appraising Townhouse Value: Which Method to Use?

Explain the three methods used to appraise the value of our townhouse and recommend the most appropriate method to use.

Sales comparison approach is used in appraisal of single-family homes. The cost approach is used in appraisal of properties value that have been enhanced by either one or more buildings. Income approach is based on the relations between investor rate of return and net income produced by the property. Therefore, the most appropriate method that can be used by the family is the income approach appraisal

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Explain and describe the information included on the TRID form and how it benefits the home buyer?

The TRID contains six pieces of information that are consumer's name, income, social security number to get credit report, property address, estimate of the property value and the mortgage loan amount sought. This helps to address information and knowledge possessed by borrowers before receiving mortgage.

If we decide to rent out our home, we would like to exclude tenants that have a pet of any kind or for any purpose. What, if any, government regulations will impact this decision?

The government regulations may affect the decision to exclude tenants from having pets, but as the owner of the house, you can set your regulations.

List the steps in the loan process used to qualify us for a mortgage and explain how our current mortgage balance may impact the qualification decision?

The loan process to qualify for a mortgage, the first step is getting qualified, followed by verification of income documents, it is followed by appraisal, followed by title search and title insurance and the final process is the underwriting decision that can be either approved, denied, suspended or approved with conditions.

Explain the advantages and disadvantages of selling or renting our townhouse. Assume that we would have to take an early distribution from our individual 401Ks to make the down payment on a new home.

The advantage to rent is that the owner will get to keep the old house and the new one. Also, the tenant will pay the remain mortgage on the townhouse. The disadvantage is that you will not be able to use the equity of the townhouse. Also, you will be liable for the loans of both houses you own.

If we stopped making the monthly mortgage and escrow payments, what action(s) would the bank take?

If you are late on your monthly mortgage your lender will not be required to offer an escrow account analysis statement. Defaulting on your mortgage loan will result the lender to make your property tax payments that is remaining in your escrow account.

Regarding our townhouse, which course of action would you recommend: selling the townhouse, renting the townhouse, or stopping the mortgage and escrow payments?

The best action to take is renting the townhouse since selling it will incur costs. Also the house is guaranteed to be stronger in the next few years it is going to raise the value significantly. Thus, to rent the property will be appropriate as you pay the mortgage, you will be able to secure a huge payday in the future.