Mortgages, appraisals, and finishing up: Guidance needed

15 years ago

Here's the deal: we are way behind, partly because some of the jobs I decided to do myself have taken way longer than I anticipated, and partly because my builder has had some very tough health issues.

I've extended the construction loan 3 times, am determined not to do it again [not sure the bank would be willing, anyway].

The appraisal for the mortage co. is scheduled in 2 weeks, no way will we be 100% finished. [Upside, looks like the mortgage is approved pending the appraisal, and the money doesn't change hands till the end of the month. Still probably won't be 100%, but should be very near it.]

For instance, the cabs will be in the kitchen, but the granite won't.

Not all the baths will be done, but the flooring will. Unless my builder gets to feeling better, the sheetrock and doors won't be in the garage, either.

But my locality doesn't have certificates of occupancy, this isn't in a subdivision or incorporated town, and there are no inspections other than electric and sanitation.

I'm looking for a $400k mortgage on a 5500s.f. house that appraised [for the construction loan] at over $800k-- I assume that appraiser was 'projecting' the value when finished.

How worried should I be? If an 'as is' appraisal is comfortably above the mortgage amount, will that do? Or should I find some extra help for jobs my builder may not get to? Which jobs should be top priority-- finishing an upstairs deck [3 are already done], finishing both master baths, or a kitchen as complete as possible?

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Comments (4)

lyfia
15 years ago
For an appraisal, certain finishes will play a part. Such as granite vs. laminate counters etc. Do you have a way to show what the finishes will be? A finished garage would also appraise higher than an unfinished. What is not done in the baths?

I'm not sure they will count all the baths if they are not finished. Baths do add value as well.

I think you need one finished master bath or the bank could potentially balk at too many unfinished things as well.

It doesn't necessarily sound like you need to worry so much though about the appraisal if you think when complete it would appraise for double of what you need.

Of the things you listed I'd get a master bath so it is livable. I think countertops is fairly minor in the overall appraisal value. Do you have appliances and cabinets then I think that is probably good enough.

As for finishing one deck vs. 3 already done. Although a deck also adds value, not sure it would be that huge of a difference with one not done.
vancleaveterry
15 years ago
Any way you could get some extra help in to completely finish the kitchen(granite and all)?

That and at least one finished bathroom would be what I would think an inspector would be looking for.

Just a guess.
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IÃ¢ÂÂm in Florida, just sold my house, and was worried about the appraisal verses the contract price. A house down the road around the same square foot as mine appraised at a certain amount but it had a pool. I wanted my appraisal to come out the same even though I did not have a pool. My house had better quality new stuff than that house. We did many resent upgrades and I provided a very detailed list that included the way and what with the interior cabinets were finished, type of glides, name of fencing type and the process the manufacturer used for the backed on finish, grade of granite or marbleÃ¢ÂÂ¦you name it, it was all listed in detail. I also detailed how well maintained our home was and provided documentation for that. Although my house is only thirteen years old it was mentioned in the appraisal report something to the affect that it was comparable to a new semi-custom to custom home. So yes a list will help to a point. Square footage is the main gig though. My house ended appraising the same as the pool home. I did have to come down three and a half grand from the contract price though. ThatÃ¢ÂÂs a common thing at the moment with the larger homes. The smaller more affordable homes are so sought after at this time (limited listings) IÃ¢ÂÂm seeing more people cough up the extra cash just to nab one.
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, but will remove the light fixtures and hang the builders grade back up. Frankly when I just sold my condo, I removed all my quality light fixtures, packed them up to be put in my new build and got inexpensive light fixtures that looked good for resale. I also had some expensive cabinet pulls in my two bathrooms and replaced them with basic HD ones. Emma and Cpartist, so my 2700 sq ft house irreguardless of any upgrades is comparable to a builders grade, bare bones home? Well as Frank Sinatra once sang, Ain't That a Kick in the Head. lol I'm confident the house will show quite well, and i'll recoup a good portion of my upgrades, The point is if all the builder basic houses in your neighborhood are selling for $300k then you may get $310k. So even if you put 50k in, you won't get it back. As mentioned, it will make your house show better and will probably make it sell much quicker. You don't want to price it above the other houses in the neighborhood because no one wants to buy the most expensive house in a neighborhood. What happens if you're priced too high is one of two things. Either lots of folks will come through looking to see why you're the most expensive house in the neighborhood but won't write you an offer. So you'll wind up having to drop your price. Once you have to start dropping your price, it makes your house feel less desirable. Or someone will come in with a very lowball offer to see where you might go. From what you've said it's still a builder basic house, that you made nicer.
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carterinms
15 years ago
We're in a similar situation as oruboris was in last year - we need to move into the house next month and would like to get a conventional 30-yr mortgage. The finish house appraises for twice the loan we need. Things unfinished will be carpet in the two upstairs bedrooms; countertop, sink, and faucet won't be installed in the upstairs kitchenette, and base molding won't be complete upstairs. For the downstairs - no crown or base molding, kitchen cabinets won't be complete, and most interior doors will not be installed. Oh, and the closets will not have the hanging rods & shelves.

So, I called my bank last week to see which of these items we need to focus on after we move in, in order to get a loan. I was told that the house has to be 100% complete - every last piece of crown molding has to be in. The direct quote I got was, "anything that would increase the appraisal has to be done".

I see threads all the time where people move into a partially completed house - what sort of loans are they getting? Or is this a result of the housing crisis?

Anyways, I will be talking with another bank next week, and we still have the option of converting our construction loan to a 20-year loan at a not-great-rate. Just wondering how other people handled this situation.
crazyhouse6
15 years ago
We just recently closed on a new build and were looking for less than 50% of the est. value. It was not a owner build, so I'm sure things are different, but we had a driveway included in the estimate that didn't get done due to the weather conditions. The bank was completely bent out of shape about it and although the city had withheld funds for it, they made us escrow more than 100% of the cost of the driveway. It doesn't make any sense to me why they were so crazy about it since we were getting a loan for so much less than the value, but they are making it more and more difficult for everyone to get financing.

Mortgages, appraisals, and finishing up: Guidance needed

Comments (4)

lyfia

vancleaveterry

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