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Low appraisal valuations could turn your loan approval refinance sideways

Posted in Financing- Loss Mitigation,Lender News Reports,Real Estate by Administrator on the October 6th, 2012

Low appraisal valuations could turn your loan approval refinance sideways

appraisal value check

Make sure you know the recent sales in the area and their Square Footage.

My immediate subdivision has been hit hard by foreclosures and short sales. This makes my refinancing risky, especially when the appraisal numbers might not come in.   Accepting the fact that my condo is worth less today than when I bought it; I’m guessing the value of my condo is somewhere around the value of my existing mortgage.  Appraisals are expensive and so is the time a loan officer puts in to bring my refi forward so the best course of action… research!

“You can have everything in line- Credit Scores, Debt vs Income to manage the mortgage payments but low appraisal value is the No. 1 reason why loans are declined.

The most important thing is to have key information like an accurate square footage of the residence called GLA or Gross Living Area.  In Illinois-Cook County GLA is expressed as above ground living space.  In the case of split level houses; some houses, will not include lower level rooms or Square Footage and in others it will be included.  This poses another issue that owners need to be aware of when selling.  If it’s not in your benefit changing SFage on the tax records may not be important until you go to sell your home.

Checking thru your property assessors information will help you ferret inaccurate information that the appraisers use to value property.  The assessors office is the authority used to measure one home against the other.

Information as to what has sold in the last 6 months in your neighborhood is very important because the appraiser is going to go on the list of transactions from the assessors office and Multiple Listing Service.

Errors are common, checking in on the comparables in the area and doing your own research to make sure the comparables used are going to be valid is something you can do to make sure the appraiser used the right comparables.  In city environments a .5 or less radius or in the suburbs up to 3 miles may be used.  By the way, don’t blame the appraiser, blame the stored information.  Using a Realtor can help you to gather the information you’ll need to assure a smoother appraisal process, just ask for a CMA and look for similar units to yours that have recently sold.  You’ll need a minimum of 3 solds and 3 active listings with similar SFage to your home.  If they are high enough to warrant a refinance on your mortgage venture forward and begin the process.

One reason the SFage numbers are skewed and homeowners don’t care is that Property taxes are based on those assessor report cards.  This means if you think you are paying too much- you should be checking those numbers.  In many cases homeowners don’t opt to change the tax records because changing them would mean increased property tax payments.

Thanks to an election year and optimisim that our 2008/2009 low prices are behind us, we may in fact be seeing the 1st glimmer of light and improving pricing.  This means refinancing is becoming more of a possibility and homeowners trying to refi into a lower mortgage payment is becoming more of a reality.  Just make sure you check your surrounding area for values before you spend your money on an appraisal.

ProfessionalRealtyPartners.com

 

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