Fighting back against low appraisals

If you’re looking to refinance  your home, it’s vital to have an accurate appraisal of what you own. But what if your appraisal comes back inaccurately low? The Wall Street Journal recently tackled this issue. Here is what they advise:

  • Look at comparable sales from the past three to six months before seeking a mortgage. It’s important to have a realistic view of the price other people have paid over this time period for houses similar to yours and in your neighborhood.
  • Accompany the appraiser during the inspection, pointing out improvements that add to your home’s value. If necessary, provide the appraiser with comparable sales that can be used to support the valuation. (See previous point.)
  • If refinancing falls through as a result of low valuation, start the process over — wait a few months and resubmit your loan application to a different lender.
  • Request that the lender review the appraiser’s findings. In rare circumstances, the lender may find that the appraiser made factual errors such as an erroneous number of bedrooms or miscalculated square footage.
  • Ask the lender to order a second appraisal. Though you may have to shoulder the cost burden for the second appraisal, the average appraisal cost nationally is around $400, and may yield positive results.

With interest rates at a record low, refinancing is a very appealing option for many homeowners. Don’t let inaccurately low appraisals throw a wrench in your refinancing plans!

Photo courtesy of Flickr user vxla