Earn money with a lower appraisal valueUncategorized
ABC research shows that appraisers systematically value homes too high. The figures in this study say enough. Many appraisers first look at the purchase price and “adjust their appraisal value accordingly”. So there is no question here of an independent appraisal value. The reverse also happens. I can already see the question marks appear above your head. Why would an appraiser “express” appraise a property lower? What is the advantage for a buyer to settle for a lower appraisal value?
Lower valuation due to ABC standard amounts
The answer to this last question is very simple: with a long fixed-rate period, this can yield thousands of euros. All this has to do with the differences in the amount of mortgage interest on a mortgage with National Mortgage Guarantee (ABC) and without ABC. On the ActueleRentestanden.nl site you can easily see that the mortgage interest rate of a mortgage with ABC is quickly half a percent lower than when ABC is not possible.
Let me give a simple example. A property is being bought for 295,000 euros. If this property is valued higher than 290,000 euros, then a mortgage with ABC is not possible. ABC is possible if the appraisal value is a maximum of 290,000 euros. The disadvantage is that the buyer has to contribute 5,000 euros extra own funds, but this disadvantage is more than compensated for by the interest benefit that can be achieved.
Below are the two elaborations involving an annuity mortgage with a fixed-interest period of 20 years.
Example calculation without ABC
- Purchase price and appraisal value is 295,000 euros
- Annuities mortgage 295,000 euros
- Mortgage interest rate 20 years fixed 2.65%
- Gross monthly charges 1,189 euros
Calculation example with ABC
- Purchase price property 295,000 euros
- Appraisal value of the home 290,000 euros
- Extra contribution of own resources 5,000 euros
- Costs ABC 2,610 euros (are tax deductible once)
- Annuities mortgage 290,000 euros
- Mortgage interest rate 20 years fixed 2.10%
- Gross per month 1,086 euros
The gross monthly benefit with a ABC mortgage is 100 euros. In 20 years, this is an amount of 24,000 euros. This amount will be lower because this homeowner still has an interest deduction. In the case of a mortgage without a National Mortgage Guarantee, the gross monthly payment is higher, but the homeowner does not have to contribute 5,000 euros in extra own funds. Moreover, the costs of ABC (2,610 euros) do not apply (which are tax deductible once).
Anyone who does have these 5,000 euros of own resources can still earn thousands of euros at the bottom of the line by taking out a mortgage with ABC. The appraiser must cooperate in this regard to appraise the appraisal value at a maximum of 290,000 euros. Practice shows that in this situation many valuers value the value at 290,000 euros. The result is very satisfied customers and that is what it is all about for an appraiser.
For whom disadvantageous?
Of course you as a reader will state that a lower appraisal value is not a problem for everyone. This is partly true. The buyer will certainly not complain. This pays less over the entire term of the mortgage because of the lower mortgage interest rate. The bank will not complain either, because in the event of financial problems ABC guarantees a possible loss. Then remains about ABC. This has drawn up rules that everyone must adhere to. However, this is not the case as the appraiser deliberately places a lower appraisal value in the appraisal report. Finally, the appraiser. This shows that it is not reliable. He must independently assess the value of the home. This does not apply in this situation.