Low Appraisals and Your Home’s Refi

Low Appraisals and Your Home’s Refi
  • Opening Intro -

    Refinancing a home can yield tremendous savings for some homeowners, but getting it refinanced means having it appraised properly.

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The valuation of your home and refinancing.

If your property fails to meet your appraisal expectations, then you may not be able to finance. In January 2012 one in three home buy contracts were canceled because of refinancing problems reports Zillow.

If your home appraisal doesn’t come in high enough, don’t fret — you can take several steps to remedy the problem, perhaps raising it to an acceptable level:

Get local comps — Certainly, it is the appraiser’s job to secure local home sale comparables (comps), but that doesn’t mean he has a full understanding of your market. For example, if a home sold without benefit of an agent’s assistance, information about the sale may not be found in the multiple listing service. Contact your local property tax department and look for homes that were sold directly by the owner.

Improvements and upgrades — An appraiser should take into account whatever improvements and upgrades you made to your home since you bought it. Energy efficient windows and new doors may be apparent from the outside, but did she step inside your home to see your updates? Even if the appraiser did, she may have missed the new flooring you had put down or the new HVAC system in place. Take note of these attributes in your appeal.

On location — An appraiser might miss certain distinguishing characteristics about your neighborhood that can affect his valuation of your home. Your home may be worth more if it is located on a quiet street. If it is in a historical neighborhood, your home’s value should benefit even if the home isn’t a landmark itself. Even access to a park or upscale shopping can benefit your home’s worth. But, be forewarned: if your neighborhood is in decline, your lowered appraisal may very well reflect this most unwelcome trend.

Work on the curb appeal — Your appraiser may have gotten everything right when valuing your home. The problem with its appraisal may be squarely based on its curb appeal and other factors that can devalue your home. Though these issues should have been taken care of before your appraisal, you can address them now and seek a fresh appraisal. This means tending your lawn, removing overgrowth, fixing cracks in a driveway, touching up the outside of the house and handling interior repairs including ripped carpeting, peeling paint and a broken fixture. That clunker car you have been meaning to repair should be garaged or removed from your property.

Low appraisals can be remedied by appeal. You’ll need to complete the steps mentioned above first and you may need to work with a new appraisal company.

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Categories: Home Financing

About Author

Matthew C. Keegan

Matt Keegan is a freelance writer and editor as well as publisher of "Auto Trends Magazine", an online publication. Matt covers campus, consumer, business and financial topics on various websites and weblogs, and has been published in the "Houston Chronicle", "Sam's Club Magazine" and "Wisconsin Golfer".