• Welcome to AppraisersForum.com, the premier online  community for the discussion of real estate appraisal. Register a free account to be able to post and unlock additional forums and features.

Appraisal For Refinance

Status
Not open for further replies.

Jim Burch

Freshman Member
Joined
Jul 7, 2003
The wife and I decided to refinance our 30yr loan to a 15yr loan. We bought the house new 1.5 years ago and paid 236,000.00. The mortagage company we refinanced through sent out an appraiser and the new value was only 240,000.00. We are on a private 3.6 acre lot and there have been no changes to our area since the move. It seems the value of the home would have increased more than $4000.00. We are currently paying PMI, is this a way for the mortgage company to keep us from removing the PMI sooner? Any ideas why we are not seeing a bigger increase? The home is located in Goochland, VA.
 

Mike Garrett RAA

Elite Member
Gold Supporting Member
Joined
Jan 14, 2002
Professional Status
Certified Residential Appraiser
State
Colorado
Can't answer that because I don't know your market. You need to consult another appraiser if you thing the value is low. Not uncommon for a person to add lots of upgrades in a new home that will not return your investment in the first few years.

I am sort of in the same canoe....we bought new 17 months ago...it was the highest priced ranch style home in the subdivision because my wife likes ceramic tile floors (a $6,000 upgrade), central air conditioning, and upgraded plumbing fixtures. Then we spent another $5,000 on landscaping....looks nice but hard to get an appraiser to value it at what we paid.

Repeat after me....cost does not mean value, cost does not mean value, cost does not mean value.
 

Ghost Rider

Senior Member
Joined
Apr 27, 2003
Professional Status
Banking/Mortgage Industry
State
Connecticut
It's an impossible question to answer without knowing the market better. Maybe you overpaid for the home when you bought it, maybe the property values in your area have stabilized in the past 18 months, maybe a lot of things......You would really need to address this with someone local, a realtor is a good place to start - give one a call (probably better if it is a different one than the realtor you used to help you in purchasing the home - if you used one) and have them do a free CMA on your home - they are usually pretty decent, and will give you an idea of the values. I don't normally say to call a realtor, but in this case, they can do a Market Analysis for free for you. If you are really worried, call a local appraiser, and have them do an appraisal for you. The appraiser who did the work for the mortgage company you are using isn't really responsible for your opinion of value - they are doing the appraisal to provide information to a lender for the purposes of them making a determination if there is equity in the property to protect their loan position.

Hope this helps
 

Farm Gal

Elite Member
Joined
Jan 14, 2002
Professional Status
Licensed Appraiser
State
Nebraska
Jim:

Unless that appraiser is related to the PMI insurance company owners (unlikely by the way) it is pretty unlikely that they are getting anything out of the deal. Pressure to make the value higher is the norm: not 'go low'.

Markets in some areas are stable, some have stagnated or gone down slightly, some areas continue to climb. In some areas one segment of the market is doing one thing (high end in particular) and the opposite in other segments. In other words it depends.

It particularly depends on YOUR local market and whats sold in it lately.

If you are greatly concerned about the valuation of your property I can recommend two avenues of approach.

The first is spend some time looking at listed homes in the area similar to yours... go to open houses, talk to some of the realtor and ask if there have been any offers on the homes for less than the asking prices. See what someone looking for a house like yours would be looking at! Ask the realtors if they know of any homes like yours which HAS sold lately... IN all honesty this is a lot of work and probably won't tell you much.

The second is to hire your own appraiser to provide you with a professional opinion of value. Not trying to drum up work for any old appraiser, I recommend that you seek someone with some years of experience in your local market and value range.

IN any case with only a 1.5 year paydown on a new 30 year mortgage in anything remotely like a stable market, unless you placed a substantial downpayment, it is somewhat unlikely that you would be free of PMI at this time. On a 15 year note you will gain ground on the magic number much faster. Keep an eye on it and get ti removed as soon as possible, but don't stay up nights worrying about it. A house is a lifestyle choice as well as investment. Enjoy the house.
 

Dave Baird

Freshman Member
Joined
Oct 29, 2002
Professional Status
Certified Residential Appraiser
State
Mississippi
I always tell my homeowners that the value of their home will be like the stock market, it will go up and down over the course of the years. Hopefully it will track on an upward swing, but from month to month or year to year it may dip some depending on the sale of the comparable houses in their market. This is especially prudent for the person who refinance their home every year. Of course most never believe me, considering their home the cream of the neighborhood even though they have not done a thing to it in 5 years.
 

Dee Dee

Elite Member
Joined
Jan 16, 2002
Professional Status
Certified Residential Appraiser
State
Colorado
Hi Jim,

The appraised value is primarily based on similar home sales in your area within the past year, but preferably within the past 6 months. This indicates what the market (supply/demand) in your neighborhood is.

All of the advice given by the other posters are good ones, but please understand that housing markets fluctuate, and not always in our favor.
For what it's worth, many homeowners around the country are getting a wake up call since they've never experienced a down market during their adult lives (not that this is the situation in your case).

In my area most of the homeowners who purchased around two years ago bought at the peak of the market when demand was high and the supply of available housing was low. Now there are lots of 'for sale' signs and fewer buyers. Sellers who want to move out badly enough are dropping their prices so that they can do so, and this sets the market trend for similar homes. Many areas around the country are seeing a decline in values of higher end homes, mostly attributed to job losses and uncertainties in the stock market.

Hope you can find more answers from people who are familiar with your area.
 

Restrain

Elite Member
Joined
Jan 22, 2002
Professional Status
Certified General Appraiser
State
Florida
Just my 2 cents. In my area, IF the builder is still working the area, the existing homes lose value against the new homes for the first few years. This is because the builder can offer a new home at very competitive rates, give the buyer an "easy in", such as no down, etc., and often offers a significant amount of hidden concessions (upgrades, buyer assistance, etc). The owner of an existing home cannot compete with such incentives and as such will have to take as much as 10-15% less to sell the home.

I know a lot of people who would be happy to see that their home had not lost value. One county in my market has the highest number of foreclosures in the U.S. and a loss in value in some areas of as much as 25%.

Bottom line, hang in there for 5 years or so and hope the market keeps going up.

Roger Strahan, IFA
 

John Hassler

Senior Member
Joined
Jul 23, 2002
Professional Status
Certified Residential Appraiser
State
California
Originally posted by Jim Burch@Jul 8 2003, 01:57 PM
We are currently paying PMI, is this a way for the mortgage company to keep us from removing the PMI sooner?
Jim

The mortgage company only earns a fee for loan originations so their incentive is to make the deal, not keep you in your existing loan (as opposed to a mortgage lender or mortgage servicer). There are alot of non-PMI loans out there so if the current mortgage company you are dealing with can not help you look for another. If you are looking at 15-year loans it sounds like your income has gone up significantly. Worst case you should be able to get a 15-year first mortgage for 80% of the loan-to-value or $192k (.8 x $240k appraisal) and an equity line mortgage for the balance. Most mortgage "companies" only deal with a few dozen of the several hundred mortgage "lenders" (the actual people with the $$$). If I were you, I would talk to as many mortgage companies as I could stomach :p and find one who knows of a mortgage lender with a loan program suited to your needs. But be prepared for alot of horse pooey, er, I mean salesmanship.

BTW - Be thankful your home is worth $4k more than when you purchased it. There are a lot of people who wish they could say that right now!

John Hassler
 

Restrain

Elite Member
Joined
Jan 22, 2002
Professional Status
Certified General Appraiser
State
Florida
Why not call your tax office or tax appraisal district (whoever does the actual appraisals). The sales they use should be public record so you should be able to go by and look at them. Alternately, call a realtor and say you're interested in selling and see what they drag up.

Roger
 
Status
Not open for further replies.
Find a Real Estate Appraiser - Enter Zip Code

Copyright © 2000-, AppraisersForum.com, All Rights Reserved
AppraisersForum.com is proudly hosted by the folks at
AppraiserSites.com
Top

AdBlock Detected

We get it, advertisements are annoying!

Sure, ad-blocking software does a great job at blocking ads, but it also blocks useful features of our website. For the best site experience please disable your AdBlocker.

I've Disabled AdBlock
No Thanks