New Alliance Mortgage

The home appraisal is an important part of the loan process and approval because it provides the current market value of your home, which plays a critical role in determining your loan amount.

Lenders typically won't offer loans that exceed a home's value, and for good reason. You wouldn't want to be obligated to pay for a loan that exceeds the value of your home. If you suddenly had to sell your home for some reason, you could fall short of paying off your loan if your proceeds didn't meet or exceed the value of your home. You would be forced to make up the difference with cash out of your pocket.

Who does the appraisal?
In most cases, you will be required to hire an outside company to perform the appraisal so they have an objective evaluation of your home. New Alliance Mortgage will help you arrange the appraisal with a professional home appraiser. In order to estimate the value of real and personal property, appraisers receive special training and hands-on experience.

What do appraisers look at when estimating your home's value?
Before your loan can be processed, an appraiser will come to your home and assess its market value. This process takes only a few minutes and involves estimating your home's value based upon:

	General condition and age of the home
	Size of home and property
	Location of the home
	Features of the home (i.e., 3 bedrooms, 2 baths, etc.)
	Major structural improvements, such as additions and remodeled rooms
	Sought-after architectural features, such as skylights and fireplaces
	Comparable properties in the neighborhood that have sold recently and their sales prices (usually the most important factor in determining the value of a home)

The following are typical home improvements and the national average return on investment:

Do you want to increase the value of your home?

Improvement		Return on Investment

	Minor kitchen remodel		87%

	Two story addition		83%

	Bathroom addition		81%

	Major kitchen remodel		80%

	Bathroom remodel		80%

	Family room addition		78%

	Deck addition		75%

	Master suite addition		74%

	Conversion from an attic to a bedroom		73%

	Replace siding		73%

	Replace windows		68%

	Conversion of a bedroom to a home office		54%
	Build a pool		0% (due to liability and upkeep)



Source: Remodeling Magazine, November 2001, © Hanley-Wood, LLC.