While you may view your home as an investment or hedge against taxes, your lender views the property as security. It is the collateral to be recovered and liquidated in the event a borrower fails to repay the mortgage. If you get a $180,000 loan secured by your $200,000 home, the lender does not want to find out later that the house is worth only $150,000.

To limit such risks, lenders hire an appraiser to make an objective evaluation of the property's worth. The appraiser provides to the lender several key pieces of information in addition to a replacement cost estimate and market analysis: 1) occupancy, 2) transition and 3) predominant value.

Housing values in neighborhoods having a high rate of owner-occupancy are considered to be more stable and less likely to decline. The appraiser tells the lender about any neighborhood transition. Are the housing values appreciating or declining and what appears to be causing the transition (e.g. zoning changes or more subtle evolutionary changes)? Finally, the appraiser notes the predominant value of neighborhood homes. Are they higher, lower or in line with the subject property?

For a free consultation to discuss which type of mortgage loan will work best for you, call Victoria Spannaus at Wachovia Mortgage Corp. at (800) 741-7813 or 910-692-6225.