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Old 07-08-2016, 10:00 AM
 
Location: Atlanta, GA
12,315 posts, read 4,886,710 times
Reputation: 7697

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Quote:
Originally Posted by gc333 View Post
So bascially this means that I have instant equity, right?
No. Someone else already answered correctly but the house is worth what you are paying for it, not what the appraiser says. An appraisal is really only useful to judge value in the absence of a recent transaction price, and only then because its really the only way to do so. The sale price of the home is what will set the value for the near future.
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Old 07-09-2016, 06:18 AM
 
7,605 posts, read 9,483,476 times
Reputation: 13781
Quote:
Originally Posted by atltechdude View Post
No. Someone else already answered correctly but the house is worth what you are paying for it, not what the appraiser says. An appraisal is really only useful to judge value in the absence of a recent transaction price, and only then because its really the only way to do so. The sale price of the home is what will set the value for the near future.
This is a zombie thread, but I feel compelled to correct this common mistake--because it is a big one. Although an individual sales price may reflect the market value, it is NOT a definitive indication of the market value. People pay more or less than a property is worth all of the time! Just because one person may overpay for a house, that doesn't mean that everyone would. A given sales price does NOT automatically make that the market value, although it may influence it.

That said, an appraisal is an opinion of value. It is an estimation of the market value based upon an independent, third-party evaluation of similar sales in an area. It's as much of an art as a science...and as will all opinions, they will vary. Hopefully, though, they are a reasonable estimate of the true market value--regardless of an agreed upon sales price for a particular property.
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Old 07-09-2016, 02:04 PM
 
12,018 posts, read 9,599,216 times
Reputation: 13420
Quote:
Originally Posted by Daddys///M3 View Post
If I'm not mistaken you posted another thread about locking in your rate on an FHA loan. The MI requirements on an FHA loan are different than conventional. For the MI to be removed from an FHA loan, you must pay down the principal balance based off of the original purchase price (future appraisals mean nothing) to 78%, or pay for a minimum of five years, whichever is longer. You should be talking to your LO about this, and they should be able to tell you exactly what I did.
New FHA loans do not allow for MI to be removed, you either have to pay for it the life of the loan or refinance when you can.
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Old 07-09-2016, 03:46 PM
 
Location: MID ATLANTIC
8,206 posts, read 20,316,560 times
Reputation: 9467
Quote:
Originally Posted by LifeIsGood01 View Post
New FHA loans do not allow for MI to be removed, you either have to pay for it the life of the loan or refinance when you can.
Yes, that changed since this thread was started and when HUD can figure out why they are being shunned, the FHA MI will change again. Every few years they try to morph into a new, friendlier agency.
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