Money Musings 💭 The Truth About Appraisals
In order to get a mortgage or refinance your mortgage, the lender will typically require you to get your home appraised. This means someone will come in to check things out and tell you how much the home is worth.
Recent studies have found that "a home in a majority Black neighborhood is likely to be valued for 23% less than a near-identical home in a majority-white neighborhood." This devaluation costs Black homeowners $156 billion in cumulative losses.
I interviewed Tiffany Aliche, The Bugetnista, for my book (she’s amazing!) and she shared that not only are people of color earning less, the things they own are worth less, just because they own them.
Tiffany and Assemblywoman McKnight are working to make it illegal to discriminate in the appraisal process (I know, why is it not currently illegal?!), but for the time being, Tiffany recommends Black and Brown homeowners do the following:
Always get a second appraisal (which unfortunately costs money)
Get appraiser recommendations from Black or Brown friends who recently had a home appraised
If possible, have a white person there during the appraisal
Bring the issue to the forefront and be upfront that you hope the appraisal is fair
Look at the details of the appraisal. Does the information in there make sense?
Don’t be afraid to be direct with the appraiser. If you think the home is worth a certain amount, tell them. Point out where you’ve made upgrades. If you’ve done your research and found the perfect comp, send it their way. You are helping your case and making their lives easier.
When we were refinancing our mortgage, we did two appraisals within two months. The first time around, we pointed out some upgrades we made, and that was it. The second time, we shared what we’d like the home to be appraised for and gave the appraiser a comp that pointed to that value. The second appraisal was almost 10% higher than the first.
MONEY MOVE OF THE WEEK
TAKE INVENTORY OF YOUR DEBT.
Take inventory of your debt. From our anonymous spending survey, I learned that 56% of our Fiscal Femme community is paying off non-mortgage debt. The first step to paying off this debt? Take inventory.
List out each credit card or other piece of debt you have along with the balance, interest rate, monthly payment, and payment date. We have a free handy debt tracker tool to help you get started and track your progress. If taking inventory feels daunting, start by listing out each debt by name (and leave out all of the details). You can build from there.
If you are looking for step-by-step guidance and support to put together a manageable plan to pay down your credit card debt for good, check out our Tackle Your Debt Course. It’s a fan favorite!
YOU GOTTA SEE THIS
EQUAL PAY DAY FOR BLACK WOMEN.
We talk a lot about the gender pay gap, which reminds us that women earn $0.82 for every dollar a white, non-Hispanic man earns. Yet for women of color, it’s actually much worse than that. Black women only earn $0.63.
Black Women’s Equal Pay Day is the day a Black woman must work into the new year to make what white non-Hispanic man made at the end of the previous year. This year, it’s August 3. Put another way, Black women have to work 19 months to earn what a white man earns in 12 months.
The pay gap for Black women is compounded by both discrimination based on race and sex, and is also perpetuated by the racial wealth gap Black families face. This gap not only affects Black women themselves but also their families. 80% of Black mothers are the sole or primary breadwinners of their families.
What can we do about it? Closing the tremendous pay gaps and wealth gaps BIPOC and women face will take systemic changes. Changes that come from policy, leadership and our institutions like raising the minimum wage, mandated paid parental leave, and affordable high quality childcare. These changes start with our vote! ✊