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What’s your home worth?

Like most lenders today, Bud Weinstock can’t remember being busier.

For more than four decades, Weinstock, senior vice president for residential lending at Sycamore-based The National Bank & Trust Co., has worked in banking.

But the past few months have taxed his abilities to keep up with the heavy demand for homeowners seeking to refinance their home mortgage loans.

“In December, January, and even now into February, I have never been as busy as I have been these last few months,” Weinstock said. “And they [applications for refinancing] just keep coming in great quantities.”

Throughout DeKalb County and elsewhere in the country, mortgage lenders and appraisers report a similar tale. Millions of Americans are seeking to save perhaps several hundred dollars a month on their mortgage payments by taking advantage of historically low interest rates.

Last week, the Mortgage Bankers Association reported that, as interest rates declined to just under 5 percent for 30-year fixed-rate mortgages, requests to refinance soared in the second week of February, jumping more than 64 percent nationwide compared with the previous week.

Weinstock noted that NB&T closed on more than three times its usual amount of refinanced mortgages last month.

“Last year for January, we did about $10 million in loans,” Weinstock said. “This January, we approved applications for $33 million worth of mortgages.

“It’s stunning.”

But while many would-be refinancers are being approved, many others have run into a major obstacle on their fast track to a quick financial fix, said Weinstock and others working in the local mortgage markets.

Perhaps as many as half of all refinancing applicants are discovering that, thanks to continued weakness in the housing market, their homes may not be worth as much as they would actually need to close the deal.

Shelley Rhoades, vice president at the mortgage division at American National Bank of DeKalb County, said the problem is rampant.

“It’s the most frustrating part of the situation right now,” Rhoades said. “We’ve got these great rates that people should be able to take advantage of, but with so many, we get an appraisal and we find out their loan is upside-down – they just owe too much.”

She estimated that six out of 10 refinancing applicants are declined for that reason.

Roger Cohn, an appraiser based in DeKalb, said he too deals with that problem regularly.

“Right now, I’d say a ballpark guess would be to take 10 percent off the value of what a home in DeKalb or Sycamore was worth before this all started,” Cohn said. “It’s that bad.”

For homeowners seeking a more concrete estimate of their home’s worth – but who don’t want to pay for a professional appraisal – the pros recommend doing some homework.

The key, said Cohn, is finding other properties against which you can fairly compare your own.

Cohn said a good place to start would be at the offices of the county recorder and assessor, reading through the lists of recent home sales.

From there, Cohn recommended taking a drive to see the homes that have sold not far from yours. Once you have found a few that are similar in style to yours, go back to the county offices, he said, and look up specifics on the homes, seeking details like gross living area and numbers of bedrooms and bathrooms.

But generally ignore sales that are more than a year old, Cohn said. And do not rely on the value assigned to a home by the assessor’s office, added Rhoades, as that figure – which relies on a three-year average of a home’s fair market value – is wholly unreliable in the current market.

Once a reasonable estimate is in hand, would-be refinancing applicants should compare it to their outstanding principal balance on their mortgages. If the home’s value is more than 90 percent of the balance, applicants should reconsider their decision to pursue refinancing at this time, Weinstock said.

“It’s probably not going to be worthwhile,” he said.

If, however, the figure falls closer to 80 percent, he and Rhoades said to pick up the phone and give them a call.

“There is the potential for huge savings right now,” Rhoades said. “You just need the right numbers to unlock it."

How can you know what your home is worth?

Here are tips from local mortgage and appraisal pros:

• Ignore your home’s estimated assessed value on property tax forms. It relies on a three-year average, which will make your home seem to be worth more than it is in the current market.

• Ignore any appraisal more than a year old.

• Research recent home sales in your neighborhood. Ignore all sales more than a year old, and rely more on sales within the past three months.

• Compare only with homes roughly similar to yours in terms of style and amenities.

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