I’m trying to refinance with a locked rate of 6.25%, but it’s about to expire. My home was recently appraised $6k lower than needed, despite improvements like a widened driveway and an added pool. The new appraisal didn’t value these as highly as expected and even miscalculated my home’s square footage by about 200 sq ft. I’m waiting for a review from the AVP, but it’s been almost a month with no update. My LE is expiring soon, and I’m worried I’ll lose my rate. Any advice on how to handle this situation?
You might consider bringing the $6k difference to closing to maintain your lower rate. However, remember that a pool might not always increase property value significantly.
Willoughby said:
You might consider bringing the $6k difference to closing to maintain your lower rate. However, remember that a pool might not always increase property value significantly.
Financially, it’s tough for me right now due to a recent divorce. I can’t afford the $6k, and my salary only just covers my expenses. I built this house to be accessible for my child who uses a wheelchair, and I can’t consider selling it.
@Drew
It sounds like you need to reassess your finances and consider all possible options, even though it’s tough.
It sounds like your reconsideration request might have been denied, and your loan officer is hesitant to deliver the bad news. Reconsiderations usually don’t take more than a week. You might need to consider a new appraisal or a different lender if the current one isn’t working out.
@Ode
My loan officer just got back to me; he’s been delayed by the holidays. He’s asked me to provide comps, which I’m currently gathering. It’s tricky because not many similar homes have sold recently. I’m considering paying for another appraisal if this doesn’t resolve soon.
@Drew
Be careful with multiple reconsiderations as they are generally not allowed. You might need to start fresh with a new lender if this one doesn’t pan out. Unfortunately, switching lenders would mean losing your rate lock.
@Ode
That’s incredibly helpful to know, thank you. I didn’t realize that about reconsiderations and rate locks.
The appraisal might be influenced by recent sales in your area. If homes similar to yours sold for lower prices, it could affect your home’s appraised value.
If your three-season room isn’t heated or cooled separately, it won’t count towards the total square footage, which could explain some of the discrepancy in appraisal values.
Zorion said:
If your three-season room isn’t heated or cooled separately, it won’t count towards the total square footage, which could explain some of the discrepancy in appraisal values.
The room is fully integrated with the house and stays as warm as other parts, even without separate heating. But if that’s the standard, it explains why it wasn’t included. Still, there seems to be a discrepancy in the square footage calculations across different appraisals.
@Drew
Yes, that’s the standard. Appraisals can vary based on many factors, including the appraiser’s discretion and the guidelines they follow.
Don’t count on the pool adding value. In fact, it might decrease the pool of potential buyers. Also, your driveway extension likely won’t significantly impact the appraisal. You might just need to bring additional cash to closing to bridge the gap if refinancing is crucial.
When does your rate lock expire? You might need to request an extension due to these issues.
Noor said:
When does your rate lock expire? You might need to request an extension due to these issues.
It expires on January 10th, 2025. I’m trying to get everything sorted out before then, but it’s a tight timeline.
@Drew
You should definitely ask for a lock extension given the circumstances. Most lenders will accommodate this, especially if it’s close to resolution.
Consider asking your lender to extend your rate lock at no extra cost while this appraisal issue is resolved. I’ve seen many clients in similar situations where lenders were willing to be flexible.
Sometimes issues like these are a sign that it might not be the right time to refinance. Consider all your options carefully.
Fight for a fair appraisal! You can challenge the appraisal by providing accurate comps and highlighting any errors in the report, like the square footage.
Franz said:
Fight for a fair appraisal! You can challenge the appraisal by providing accurate comps and highlighting any errors in the report, like the square footage.
It’s important to remember that appraisals are subjective but must adhere to strict guidelines. If there’s a significant error, like with square footage, it should definitely be addressed.