Lawrence, KS Real Estate
Nate Paradis

How A Broker’s Price Opinion Can Affect Your Refi…

While we may have seen the low for mortgage rates, homeowners with a mortgage a few years old may still be considering refinancing their loans.  We closed on our new loan last month and were able lower our interest rate and monthly payment with only a nominal effect on our principle balance.  Perhaps you too are planning to stay in your home at least 5 more years?

But not so fast… just as your lender needed assurance of the property’s value before issuing the original loan, you can bet they’re concerned this time around too.  There’s a good chance they’ll use a tool called a Broker’s Price Opinion (BPO) to make sure your loan-to-value ratio is within their guidelines.  If the bank isn’t satisfied with the value as determined by the BPO, they may not approve your new loan.  This opinion of value is usually determined via an exterior, drive-by inspection of your home, a few hastily snapped photos and a look into currently listed and more importantly, recently sold properties.  These will be homes of similar age, style and total living area — all within 1 mile of your home if you live in the city.

In full bloom
Creative Commons License photo credit: juhansonin

The point is, you’d do well to evaluate your home’s current market value before getting too far ahead of yourself.  Before spending the money for a loan app and waiting for your BPO to be completed, you might consider calling your real estate consultant and asking for a Comparative Market Analysis (CMA) for your property.  The comparable (“comps”) sales may or may not surprise you but at least this way you’ve done your homework before committing much time or any money.

Call me today your free CMA.  Empower yourself with information before taking that leap!

– Nate 785.550.8947

P.S. As I mentioned, your home will probably be photographed for the BPO.  This means the outside condition and curb appeal might weigh heavily on the broker’s opinion of value.  First impressions, right?  So consider tackling those small projects and display your home at its best!


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