Homes in majority-Black neighborhoods valued $48,000 less than non Black neighbourhoods in US
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Hamartia Antidote
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Well the values are market driven...and in big markets $48,000 is not much when housing goes for > $1 Million
Plus appraisals have nothing to do with selling price. Most people PREFER lower appraisals as this would allow them to pay lower property taxes.
However the author was trying to do a cash-out refinance ( https://www.businessinsider.com/per...undervaluing-homes-black-neighborhoods-2020-9 ). Meaning you owe say $300,000 on a mortgage and you get your house appraised for $1,000,000...the owner wants to get a loan for say $500,000 and use $300,000 to pay off the original mortgage and have $200,000 in cash handed to them.
This is how shady 3rd party appraisals can cause a financial crisis of bad bank loans.
So what the town says for taxation should be used as the max.
Plus appraisals have nothing to do with selling price. Most people PREFER lower appraisals as this would allow them to pay lower property taxes.
However the author was trying to do a cash-out refinance ( https://www.businessinsider.com/per...undervaluing-homes-black-neighborhoods-2020-9 ). Meaning you owe say $300,000 on a mortgage and you get your house appraised for $1,000,000...the owner wants to get a loan for say $500,000 and use $300,000 to pay off the original mortgage and have $200,000 in cash handed to them.
This is how shady 3rd party appraisals can cause a financial crisis of bad bank loans.
So what the town says for taxation should be used as the max.
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Hamartia Antidote
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The only time a 3rd party appraisal matters is when you are trying to suck out as much home equity into cash as you can using a bank loan. So I have no sympathy if a home appraiser doesn't give you a number better than the town's appraisal.
Did Home Refinancing Boom Trigger the Financial Crisis?
The residential housing market can burn down even when bankers restrain their lending, financial regulators dutifully police their beats and government officials tweak the right monetary dials. That's the conclusion of an interesting new study by economists including Nobel laureate Robert...
www.cbsnews.com
The residential housing market can burn down even when bankers restrain their lending, financial regulators dutifully police their beats and government officials tweak the right monetary dials.
That's the conclusion of an interesting new study by economists including Nobel laureate Robert Merton of Harvard and Andrew Lo of the MIT Sloan School of Management. Under certain conditions, all it takes to fan the flames is for a critical mass of people to extract money from their homes in the form of home equity loans, sales and "cash-out" refinancing. When that happens, the interplay of rampant mortgage refinancing, falling interest rates and rising home prices becomes a dangerous feedback loop.
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Gomig-21
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$48K that's it? I thought it would be much more than that! That's actually not bad at all. Of course it depends on what the comparison is made against. What is the average cost of a home that they're using as a bench mark for the difference of $48K?
Like Ant said, if it's against homes that are valued at even $400K it's not as much as you would think.
Like Ant said, if it's against homes that are valued at even $400K it's not as much as you would think.
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