Better yet, present a factual case for a higher value to the original appraiser. They may agree with you and revise the evaluation. Federal guidelines intended to eliminate the inflated appraisal values that contributed to the housing crisis sometimes cause appraisals to come in below fair market value and can make low appraisals difficult to challenge.
Holding out for an all-cash buyer who doesn't require an appraisal as a condition of completing the transaction is unlikely to net you a higher sales price. No one wants to overpay for a home. Unfortunately, if your surrounding area has experienced recent distressed sales , that can lower your home's appraisal value.
Getting an appraisal is also a required step when giving a home to a family member as a gift of equity. If you're refinancing a conventional mortgage , a low appraisal can prevent you from doing so. The home needs to appraise at or above the amount you want to refinance for your loan to be approved. However, if your existing mortgage is an FHA mortgage , you can refinance without an appraisal through the FHA Streamline program—a great option for underwater homeowners.
When everything goes smoothly, the home appraisal is just another box to check on a closing checklist. When the appraisal value is lower than expected, the transaction can be delayed or even canceled. Regardless of which situation you encounter in your home buying, selling, or refinancing experience, a basic understanding of how the appraisal process functions can only work in your favor, especially if you're buying your first home.
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How to Refinance. Refinancing vs. Other Options. Home Ownership Mortgage. Table of Contents Expand. See banking services provided by Axos Bank ». Email for closed account inquiries Nationwide Bank Nationwide Advantage Mortgage Company More info about closed bank account inquiries. On your own Renting your first apartment Buying your first home Your first job Learning how to budget.
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Getting a home equity loan Unlike refinancing, home equity loans are a second loan on top of the existing mortgage. Work with the appraiser by offering neighborhood data, pointing out interior and exterior improvements and reviewing scheduled maintenance. The better you are at making your home sparkle the more likely the appraiser is to give you a higher valuation. Private mortgage insurance — also called PMI — is a mandatory expense when financing a home with a conventional loan using less than 20 percent down payment.
The insurance protects the lender — not you — should you be unable to make the payments. The PMI is part of the monthly mortgage payment for a scheduled amount of time that the lender estimates it will take for the principal balance of the loan to reach 78 percent of the original value.
With housing values in the City by the Bay rocketing steadily since , a particular surge in neighborhood selling prices provides an opportune time to pay a few hundred dollars to prove your loan balance is less than 78 percent of the home's value and remove the expense early.
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