A low appraisal is a possibility when you’re buying a home. This can happen for a variety of reasons. If it happens to you, don’t panic! 

Once you get an offer accepted on a house you love, it may feel like a huge weight has been lifted off of your shoulders. As any seasoned homebuyer will tell you, this is only the beginning! 

It can be tough for both the buyer and the seller when a deal seemingly falls apart due to an appraisal that comes in too low. This is a common occurrence and there are ways to work around it. 

Reasons For A Low Appraisal

There are a few reasons for a low appraisal including:

Insufficient sales data for the area can often skew appraisal numbers

Lenders may only lend up to a certain percentage of the appraised value

If the appraisal comes in lower than what you offered for the purchase price of the home, you’ll need to come up with the rest of the cash upfront in order to purchase the property. There are other options for you if you do come into this situation.

The Appraisal Contingency

The appraisal contingency is built into your sales contract and is a protection for the buyer, allowing them to walk away without financial burden if the appraisal comes in too low. This allows you room for negotiation on the seller’s part if they really are motivated. The contingency clause isn’t a one-size-fits-all protection. Even with this clause, you could end up spending more out of pocket cash or walking away from the deal completely. It’s simply a protection.  

What If The Appraisal Is Wrong?

The appraisal can be submitted for review. The appraiser would need to explain why they didn’t use comparable sales provided by the lender. The property can also be completely reevaluated. In addition, you can request a separate appraisal from your lender. The seller may even pay for the second appraisal in order to keep the deal from falling through. 

Don’t Offer More Than You Think The Property Is Worth

When you base huge financial decisions on emotions, you could end up in a bad situation. Your offer that wins the house can quickly become a case of regret as a buyer. Many times in a tight real estate market, you’ll need to make decisions fast. If you have a general idea of property values and work with a realtor to make an informed offer, you’ll be in better shape to avoid a big headache. While you may be able to afford paying more than a house is worth, it’s not a smart financial decision.       

Low Appraisals Are An Opportunity

A low appraisal should be thought of by the buyer as an opportunity to renegotiate the sale price of the home. This step in the home buying process is a protection for you as a buyer for one of the biggest purchases that you’ll ever make.

The U.S. Department of Agriculture (USDA) offers multiple housing assistance programs for people hoping to achieve home ownership.

In spite of being offered by the USDA, you don’t need to be a farmer or rancher of any kind to qualify for a home loan. Similarly, you don’t have to buy a home miles from civilization–many popular, thickly-settled suburbs across the country also qualify for USDA programs.

In this article, we’re going to explain the different programs offered by the USDA, how to check your eligibility, how to find out which locations qualify, and how to get started with a loan.

USDA Assistance Programs

The USDA offers two types of home loans for prospective buyers. The direct program, or Section 502 Direct Loan Program, is designed to help low-income persons to acquire safe, affordable housing. The assistance for this loan comes in the form of a subsidy that can be applied directly to the applicant’s mortgage, reducing monthly mortgage payments for a certain period of time.

Another type of home loan offered by the USDA is the Single Family Home Guarantee. Much like an FHA or first-time homeowner’s loan, this type of mortgage is insured by the government. As a result, buyers can often qualify for lower interest rates and smaller down payments from their lenders.

Guarantees may be applied towards the purchase, rebuilding, or building of a rural home as an incentive to developing rural areas. Later, we’ll talk about what is considered “rural.”

Outside of help with buying homes, the USDA also provides grants and loans for repairing and modernizing rural homes.

Who is eligible for USDA mortgage assistance?

In general, those applying for USDA assistance must meet certain criteria. Applicants must meet income eligibility, be a U.S. citizen or qualified noncitizen, and must purchase a qualifying property.

For the Direct loan program, applicants must be without safe or sanitary housing and be unable to secure housing through other means. Whereas for USDA guaranteed loans, applicants need only fall under the maximum income limit.

To find out if you’re eligible immediately, fill out an eligibility form from the USDA.

How do I know which houses qualify?

Generally speaking, homes located within large, metropolitan cities won’t qualify for USDA loans. However, suburbs just outside of some larger cities often do. For example, towns located just a half hour’s drive outside of Boston have a good chance of being eligible.

To view the map of property eligibility, simply fill out the online eligibility form.

How Do I Get Started?

If you’re seeking a direct loan, you’ll have to contact your local Rural Development office. Applications for a direct loan are accepted year-round and are awarded based on funding availability.

For people looking for a private loan guaranteed by the USDA, applicants should contact an approved lender in the area. The lender will then work with the USDA loan specialist in your state.

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Wall-to-wall carpeting often gets a bad reputation. Yet, carpet is such a versatile type of flooring. Did you know that carpeting actually accounts for more than half of all flooring purchases every year? Carpet offers many advantages that other types of flooring do not. Here, we’ll show you some of the many advantages of a home with wall-to-wall carpet.

Warmth
Carpet is great in rooms like the bedroom, the family room and other rooms where you’d like to have something cozy under your feet while you’re typically walking barefoot. It’s much nicer to walk on a soft carpet than a cold floor with bare feet. Carpeting also makes a room appear more homey when you first walk into it, so it’s aesthetically pleasing.

Installation and soundproofing
Carpeting adds an extra layer of insulation between the floorboards of your home. Carpet will build a sound barrier between the upstairs and downstairs, for example. Carpet reduces noise from foot traffic in your home as well as blocks the transmission of sound. This creates a soundproofing of sorts between rooms with carpet and those rooms without it.

Safety
Carpet is much more slip resistant than hardwood or tile floors. If you have children, they’re at risk of taking falls. Wouldn’t it be better for them to fall on a soft carpet rather then a hard, cold floor? We think yes! Carpeting in playrooms and bedrooms is a great way to add a built-in safety feature to your home.

Flexibility in decor
Since carpet comes in so many different styles and colors, it’s certain that you can find a carpet that is perfect for any room. The possibilities are endless! The color and style of your carpet can be the foundation of the decorating scheme for a room.

Low cost
Carpet is low in cost compared to other tapes of flooring. It can be professionally installed at a price that won’t break the bank. Since the cost per square foot is lower, you can cover a bigger portion of your home with carpet on a tight budget.

The allergy factor
While carpeting is thought of to be a bad thing for allergies, some studies have shown that carpeting can actually help keep the air in your home cleaner. This is because it traps allergens. Of course, you must make sure your carpet is properly cleaned and maintained. Carpets are easy to maintain and care for. There are many proven carpet cleaning and stain removal methods available.

Hide floor damage
If a floor in your home is damaged, it may be more cost-effective to install a carpet rather than installing a completely new floor. It’s safe to cover a damaged floor with carpeting. Installing a wall-to-wall carpet in a room with an old floor can make the room appear like new.

 

Purchasing a home can be stressful, and the homebuying process might even cause your blood pressure to rise if you’re not careful.

Fortunately, there are many quick, easy ways to minimize stress and stay calm during the homebuying process, including:

1. Don’t Be Afraid to Take a Step Back and Relax.

The real estate market remains an ongoing battle between homebuyers. Plus, after you find a house you like, you may encounter problems with a home seller as you try to finalize a purchase agreement.

But remember, as you move along the homebuyer journey, don’t be afraid to take a step back and relax.

Buying a home represents a life-changing event, one that should not be taken lightly. However, homebuyers who try to rush through the homebuying process may watch their stress levels rise quickly – the last thing any homebuyer wants to encounter.

If you feel stressed at any point during the homebuying process, be sure to take a deep breath and focus on the big picture. By doing so, you’ll be able to improve your chances of remaining cool under pressure and simplify your journey from homebuyer to homeowner.

2. Stay Organized.

As a homebuyer, you may be required to make phone calls and emails as you move along the homebuying journey. And in some cases, problems could arise if you don’t document your conversations properly.

But a homebuyer who devotes the necessary time and resources to stay organized should have no trouble tracking phone calls and emails that are sent to a home inspector, lender or other professionals who may be involved in the homebuying process.

Jotting down notes on phone calls usually is a great idea for homebuyers, as this allows you to keep track of your conversations. And if you send emails, you already have a surefire way to monitor any messages you send or receive, too.

3. Hire a Courteous, Diligent Real Estate Agent.

Let’s face it – it often is easy to become emotional during the homebuying process. On the other hand, if you have a courteous, diligent real estate agent at your side, you’ll be better equipped to overcome any hurdles that you may encounter during this process.

Your real estate agent will offer information about upcoming open houses and set up home showings, enabling you to check out many homes that fit your needs. Also, this professional ultimately will serve as a liaison between you and a home seller and can help you stay calm, cool and collected during negotiations.

Furthermore, your real estate agent will keep you up to date as you progress through the homebuying journey. As a result, this professional is exceedingly important and can help streamline the process of buying a home.

The homebuying process can become time-consuming and complicated, and as such, cause stress. Conversely, if you use the aforementioned tips, you should be able to simplify the process of finding a home that suits your perfectly and buy this residence without delay.

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