How can an appraisal hurt your options at refinancing?

Since an appraisal is a vital part of any purchase or refinancing transaction it can definitely have an adverse effect on getting the best loan pricing. Unfortunately this is beyond your control as to what the value may come in at. The higher the loan to value the more likely that your interest rate will be higher. This is due to risk based pricing. The higher the loan to value is the more risky the loan becomes. The positive outlook on this is that the appraisal can also save you a lot of money by protecting you from possibly paying more for a home than what it is worth. You will then have the opportunity to go back to the seller and have them lower the purchase price to the actual appraised value.ENG Lending, A Division of Bank of England, always puts your best interest first. We would appreciate the opportunity to serve you. Please visit us at www.cincinnatimortgagerate.net. You will soon find that we are so much more than a Mortgage Banker; we are a company that is dedicated to empowering our clients and referral partners. Don't forget to visit our Facebook Fanpage at http://www.facebook.com/pages/ENG-Lending-Cincinnati/171183536269710#!/pages/ENG-Lending-Cincinnati/171183536269710?sk=wallOr Call Anytime 513-403-6260

The appraisal is very important to a refinance, and can create problems. If your home value has dropped since you bought your house, and you appraisal shows that you have less than 20 percent equity in your home, it might mean you have to start paying Mortgage insurance in order to do a refi. If you have less than 5 percent equity in your home, you may not be able to do a refinance at all! There is an Obama refinance program, Making Homes Affordable that allows refis up to 105% loan to value without needing MI, if your loan is currently owned by Fannie Mae or Freddie Mac. Contact a mortgage lender to check your situation and options. (My number is 707-364-4115)

Your mortgage is secured by your home.. your home's value is determined by the appraisal. All conventional loans require an appraisal unless you have a current FHA mortgage and are going to refinance using FHA streamline refinance option. This type of refinance does not require an appraisal. If you're going conventional, then depending on what your Loan to Value is, will determine where your new interest rate will fall. WilliamAcres.com

(Hope this doesn't repeat what others tell you here - no time to read them.)Appraisal is ordered after purchase terms are agreed to, escrow is open, loan file is open, and transaction is well under way. It is after-the-fact when the appraisal surfaces. Do your homework in advance - know the market, know the values, and know your price range. It is a very specific process too lengthy to go into now. If you have done the above then these are the outcomes.1. Appraisal is higher than contracted purchase price. a. No impact. b. Seller hears of value and becomes less cooperative.2. Appraisal is lower. a. The loan amount is based on a percentage of the purchase price or appraisal - whichever is less. i. Your down payment will have to be increased. ii. The higher loan to value will potentially put you in a more stringent underwriting category. Also, potentially more costly. b. You may have offered too much and want to exit the transaction. c. You may have offered too much and decide to renegotiate. i. Seller has no equity and cannot take less. ii. Seller will not reduce price. Back to 2 above.I'm in South Orange County. Call me at 949 589-5800 if you have questions.Bruce ConnCALIFORNIA Equity & Loansince 1986

Appraisals are opinions with market facts. They can only justify the value of the home. Underwriters have to use the appraisal as a underlying guide should the asset go into default. It is important that there are several elements in any mortgage transaction and they have to line up with the stars and the appraisal is only one of them.