Why value matters
A home equity loan is based on the gap between your home's value and what you owe. Lenders limit the total of all loans on the home compared with its value, a measure called combined loan-to-value (CLTV). A higher value means more room to borrow, and a lower one means less.
At CapCenter, the maximum depends on the loan type and purpose, and a loan consultant can tell you yours.
Two ways lenders estimate value
- Automated valuation model (AVM): software estimates value from public records and recent nearby sales. It's fast and doesn't require a visit.
- Full appraisal: a licensed appraiser inspects the home and compares it with recent sales to form an opinion of value.
How CapCenter handles it
For CapCenter home equity loans, an appraisal isn't required in most cases. We typically use automated valuation models to estimate your home's value, which helps keep things moving. If your loan does need an appraisal, your loan consultant will tell you and help schedule it.
What an appraiser looks at
- Recent sales of similar homes nearby
- Size, layout, and number of bedrooms and bathrooms
- Condition, age and major systems like the roof and HVAC
- Updates such as kitchens, baths and flooring
- Lot, location and neighborhood features
How to prepare for a visit
You can't change the market, but you can make it easy to see your home's best features.
- Tidy up and make rooms, the attic and the crawl space easy to reach
- Fix small, visible issues like leaky faucets or broken fixtures
- List recent improvements with dates and costs, and keep permits and receipts handy
- Note anything a quick look might miss, like a new roof or water heater
If the value comes in low
A lower value leaves less room under the lender's limit, so you may be able to borrow less than you hoped. You have a few options: borrow a smaller amount, pay down your first mortgage, or ask your loan consultant whether the value can be reviewed if you believe key details were missed.
If you're close to the limit, waiting for your balance to fall or your home's value to grow can also help.
Who pays for it
With CapCenter's ZERO Closing Costs, appraisal fees are paid for or waived when an appraisal is required and provided by an approved agent (restrictions apply; see Offer details).