Navigating the mortgage process can be challenging, especially when an appraisal comes in lower than expected. Whether you’re purchasing a new home or refinancing your current one, a low appraisal can throw a wrench in your plans. But don’t worry! Here are some steps you can take to address the situation and keep your mortgage process on track.
The first step is to carefully review the appraisal report. Look for any errors or discrepancies that may have affected the appraised value. Check the following:
If you find errors or have additional information that could impact the appraisal, you can request a Reconsideration of Value (ROV). This involves submitting a formal request to the lender, along with supporting documentation, to have the appraiser review and potentially adjust the value. Additional different comparable sales are always your best bet for boosting the value.
In a purchase transaction, a low appraisal can be an opportunity to renegotiate the purchase price with the seller. Explain the situation and provide a copy of the appraisal report. The seller may be willing to lower the price to match the appraised value.
If renegotiating the purchase price isn’t an option, you may need to increase your down payment to cover the difference between the appraised value and the purchase price. This can help you secure the loan and move forward with the purchase.
Depending on your financial situation, you may want to explore different loan programs that are more flexible with appraised values. For example, some FHA and VA loans have different appraisal requirements that may work in your favor.
In some rare cases, you may be able to request a second appraisal. This can be particularly useful if you believe the first appraisal was significantly flawed. Keep in mind that this option may come with additional costs and is subject to lender approval.
If all else fails, you can appeal to the lender directly. Provide a detailed explanation of why you believe the appraisal is inaccurate and include any supporting evidence. While this approach doesn’t guarantee a change in the appraised value, it can sometimes lead to a more favorable outcome, and they may allow a second appraisal to be ordered.
If you are working with a mortgage broker, ask them to switch investors and order a new appraisal. Different investors may have different appraisal standards, and a new appraisal could result in a higher value.
If you switch from a conventional loan to an FHA loan, the change in programs would require an FHA appraisal. If the first appraiser is not FHA-approved, you would need a new appraisal. This can sometimes result in a higher appraised value, as FHA appraisals may have different criteria.
A low appraisal doesn’t have to derail your home purchase or refinance plans. By taking proactive steps and exploring your options, you can navigate this challenge and find a solution that works for you. Remember, working closely with your mortgage professional can make all the difference in successfully addressing a low appraisal.
For a free real-time quote with no credit checks, www.purerate.com/rates, call/text 704.675.7089, or email info@purerate.com
Our guiding principal is radical transparency, we make significantly less on our loans, and pass the savings on to you. In return we need our happy customers to spread the word. This allows Pure Rate to eliminate marketing expenses and deliver industry leading savings.
Take a first step towards your dream home
Free & non binding
No documents required
No impact on credit score
No hidden costs
NMLS #2578474
Settle down in your new home without a loan you had to settle for.
.svg)
.svg)
.svg)
.svg)
.svg)
.svg)
