What to do about loan home appraisals

What to do about loan home appraisals

What to do about loan home appraisals

So you made it through the initial stages of your loan application and are ready to purchase the home of your dreams. To your great dismay, however, your appraiser has just told you that your prospective home isn't worth what you thought it was. How could this have happened?

The first possibility is that you simply overestimated what this new home was truly worth. Perhaps your real estate agent was not as experienced as you thought, especially with the home values in your area.

At this point, you may be greatly disappointed, but the appraiser has probably done you a big favor. You may have been about to overpay for your new home because it simply is not worth what the seller was asking. This may be because of the home's size and location, but it could also be because of serious flaws like a poor foundation or damaged roof. Despite your initial disappointment, it's easy to see that you would have faced many more headaches down the road if there were problems with the property.

Of course, it's also possible that the appraisal was simply inaccurate. If you and your agent are confident about the property values in this particular residential area, perhaps the appraiser was wrong after all. Though this is unusual, the appraisal may simply not be as familiar with your area or may have been looking at unusual properties when comparing prices. You are entitled to ask for a copy of the appraisal and should express your reservations to your lender. You may even be able to get a second appraisal at no extra cost.

The least likely scenario (and the most unpleasant to think about) is the possibility that your lender may be purposefully producing a low appraisal. Why in the world would a mortgage lender do this? Well, perhaps your loan was approved by an employee only to be reviewed by someone in upper management who did not want to follow through with the application. Again, this process, known as sandbagging, is unusual but can happen. You can always confronted your lender about the appraisal and even ask for a refund of your loan fees if you truly believe the lender is acting improperly. You may also complain to your state's authority concerning mortgage lenders.

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