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redtartan

Have you had your home appraised?

redtartan
8 years ago

Just wondering what are the key things the appraiser looks for? I would imagine quality and type of product used for things like flooring matter. What sort of things will bring down an appraisal?

We are re-financing our mortgage since our penalty is going to be low and interest rates are so good right now. We did put 20% down when we bought this place and we have about 18 K on top of that in equity, but we'd like to roll in some of the debt we've occurred over the last 2 years in getting this property up and running into a farm.

The last appraisal was done in Oct 2012 at 400K. Land values have went up in the area since then, but I'm still feeling a little nervous about the appraisal. Probably because we have a kitchen reno that has been about 80% finished for the last 6 months.

I guess I really didn't think they'd send an appraiser out since it's the same bank we are deal with. Do I need to be worried about the kitchen? We also have no liner in the indoor pool while we wait for a new one to come. Effect value at all? Anything else I should be worried about. We don't need a huge increase or anything. I think when all is said and done it's only about a 20K difference.


Comments (49)

  • Suzi AKA DesertDance So CA Zone 9b
    8 years ago

    I had mine appraised some time ago and they mainly look at sq. feet and comps. They didn't care that my garage floor was painted or that I had installed custom storage there. They didn't care that Closet world redid my closet. Just make sure curb appeal is in place and all clutter picked up when they come out.

    I often wonder what ours would appraise for considering the house across the street is larger but has no yard. He had to drop his price to sell it. That one comp could mess with an appraisal here. I wonder if they consider foreclosures nearby as part of the comps.


    redtartan thanked Suzi AKA DesertDance So CA Zone 9b
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  • redtartan
    Original Author
    8 years ago

    See but that is why I was confused. Why send out an appraiser when it's the same house that they appraised before when we bought the place? It's the same mortgage company too. We're keeping all the same terms and amortization, just re-mortgaging. One website said they check even appliances, that's where I was really lost.

  • sushipup1
    8 years ago
    last modified: 8 years ago

    The house could be damaged since last appraisal. Eyes-on is necessary to insure that the house really does match the comps.

    redtartan thanked sushipup1
  • redtartan
    Original Author
    8 years ago

    There are no comps to this house in the area at all, not even within half an hour. It's either larger farms or houses on 1 acre. There isn't a lot of farm properties that do go up for sale. Recent sales close by were houses with less than 1 acre each. So if we have put in improvements such as turned an outbuilding into a barn with stalls and fenced off land that previously wasn't, should that be mentioned? Or is it just a straight comparison to other properties?

  • susanjf_gw
    8 years ago

    why not call and ask the mortgage company? as I racall, the last time we had someone out, it was our ins co and they never stepped inside the house!

  • rhizo_1 (North AL) zone 7
    8 years ago

    When we had our home re-appraised, they measured the dimensions of every room and closet, and the exterior. They took a bunch of pictures inside and out.

    Make sure that the house and yard are clean and uncluttered. It doesn't have to be in trying to sell condition, but you want to make a good impression.

    If you've made any upgrades, such as a new roof, heating system, etc., point them out. They won't care about fixtures. Just tell them about the liner....it won't matter.

    There are lots of helpful articles on line. I think that you'll relax after you've read up a bit.

    Check some of these articles out!

    redtartan thanked rhizo_1 (North AL) zone 7
  • redtartan
    Original Author
    8 years ago

    I guess I should point out that it's just more so that unfinished kitchen that makes me feel nervous, but I'm not nervous if we don't get it for some reason. It's more so just money savings in the long run and freeing up some cash. So if it doesn't go through it's not a big deal. I didn't mean that I am freaked out just don't want to put the pressure on ourselves to finish if we don't need to. Some of the articles I read prior to posting were saying that even your appliances matter and they take that into account. I do still have all my yardsale stuff to deal with that is piled in the pool room. I guess I should also maybe get the ducks and chicken babies out of there too eh. LOL

  • sushipup1
    8 years ago

    Honestly, it doesn't sound like you are ready for an appraisal right now. Finish the kitchen or it could be a major defect. And get the pool liner in, too. Not to mention major decluttering and livestock removal. All can count against you. The appraisal wants to see a house that can be evaluated for what it will sell for.


    redtartan thanked sushipup1
  • Suzi AKA DesertDance So CA Zone 9b
    8 years ago

    You mentioned a yard sale. Living so rural, like you do, how are you going to get people to come? It might work to list the good stuff on Craigslist and have a charity come and pick up the rest. That would get rid of a lot of junk fast, plus it's a write off!

    DH says that appraisers go by comps and square feet, but they also have plus and minus marks. A view is a plus, for instance.

    Are you in a rush because you fear rates will rise?


    redtartan thanked Suzi AKA DesertDance So CA Zone 9b
  • redtartan
    Original Author
    8 years ago

    The chicks and ducklings comment was a joke. Of course I wouldn't have them still in there for the appraiser. LOL I'm not that much of a "hick".

    The yard sale stuff is all in boxes, it's just being stored in the pool room because we don't use the pool and I can put stuff in there without worrying about boxes getting musty like in the basement. I pull it out of the box one at a time to price. We're about 7 km from a main road that is used by cottagers so while I wouldn't get the same traffic as I would in a large city, I'll still get people travelling and any locals as long as we advertise. I don't think that neatly boxed yard sale items would decrease the value of the home that much. We've already planned for a July yard sale. When this home was appraised it was before we closed on it and the previous owner had bins, and bins, and bins of items, so that's why it was never a concern of mine

    I do understand about the kitchen point, that is why I was feeling the stress of do I need to complete, but after talking over with my husband we decided that given the state it was before even not 100% it's better than it was. We'll get our toe kicks up and not worry about the fridge that needs to be boxed in (lots of people don't even have that) and the floors we're not touching. We had agreed to do the kitchen in stages and so we don't want to spend money we don't have to do the floors when it wasn't on the plan yet.

    We are not in a rush. This actually was in February that my husband called for a new bank card. Our bank was "hey why not re-mortgage". We though we'd look into it. Then we went to do the paperwork and our mortgage specialist never got back to us. My husband called and no return call. We didn't really push it because we aren't in a position where we need to refinance. Then last week we thought if we go ahead we can get back to retirement investing and have money freed up to do things like the windows which need to be done. So we called again but we're not in a rush. We did sign the paper work on Friday so we do have only a set amount of time for the appraisal but it's not like I have to have the guy come asap. We're not worried about rates, we're locked in now if it all goes through at 2.64 % and if it goes lower by the time when all is said and down the rate will go down as well.

    The whole reason I was even worried was because I read they look at everything, appliance, light fixtures, windows, walls and then I got to thinking about the kitchen. It's completely functional of course, just doesn't have all it's finishing details like the toe kicks, valance, etc.

  • plllog
    8 years ago
    last modified: 8 years ago

    What appraisers look for in rural Canada is probably different thank what they look for in urban California. Where I live the land is worth at least as much as the structure, if not more. The appliances don't matter. Here, you must have an oven for a certificate of occupancy, though I think a hookup for a freestanding range may be adequate. I agree, however, that having a finished kitchen is important. Not the decor, but all the built-in pieces: cabinets, counters, switch plate covers, etc. That's a functional part of the house. Your yard sale stuff shouldn't matter if it's stacked neatly. Make a poster paper sign that says "yard sale" so it's self explanatory. It would be different if this were for a sale. The point is to show the worth of the structure and land as a salable asset to secure the loan from the bank. Anything that can be seen as removeable junk shouldn't matter except as it might reflect badly on your maintenance. The overall impression is important. You don't want the mid-remodel and sale stuff to make it look unkempt to the point where they think you're degrading the structure. If you can't finish the kitchen, at least clean and tidy it, and neatly lay out materials, such as tile, for the next element on the list so that it looks like you're actively working on it.


    I posted before your last, LM3. The appraiser probably doesn't care about toekick and valance decor. A real estate agent would care about that. Banks know that just because the valance is supposed to convey, the people they're foreclosing on will likely remove anything they can. That usually includes draperies, chandeliers and built-in appliances. People who let it go to foreclosure rather than selling for less than they'd like to close it out and keep some shred of their good credit are either in massive denial or crooks. Few leave the property in good shape. Banks generally look for the "real" assets: Land. Standing structures (square feet and not falling down). View. Access. Comps. Location. I was surprised to read up topic about measuring closets and have to think that was the real estate agents. Square footage is generally measured from the outside of the structure.

    redtartan thanked plllog
  • Elmer J Fudd
    8 years ago

    What the bank cares about is only one thing - the house's value as security for their loan. In the event of delinquent mortgage payments, should a foreclosure be required, is it reasonable to assume the house could be sold expeditiously and that the loan balance would be repaid in full by expected sale proceeds? That, obviously, depends on many things, including the condition of the house, how prospective buyers would view deficiencies, and how much work would be required to get it ready for market.


    redtartan thanked Elmer J Fudd
  • redtartan
    Original Author
    8 years ago

    I know they take into account the land too, so not sure how that works with the outbuildings too. We have also included a pole barn structure since we bought the place. 2012 they valued the house at 300K and land at 100K so we'll see. Hubby just let me know that he thinks we have 10 days to have the appraisal done. The liner won't be here before then, but there's not much I can do about that. It is what it is. It's not like we don't already own the place so that's the good part.

  • plllog
    8 years ago
    last modified: 8 years ago

    Really? Get it ready for market? I've never heard of a bank doing that. It's usually an "as is" auction.

    Foreclosed owners tend to trash houses, or at least neglect them, and unless this is a bridge loan or something else short term, today's condition of the house counts for nothing for a sale 3-5 years from now, following a default, foreclosure and eviction. They're not going to appraise up for things that are easily changed before that time. You'll get happy points if your house looks well maintained--no leaks or water damage, no wobbles, no stuck windows and doors, doesn't need paint, weatherizing, etc. That is, the appraiser will feel like you will continue to maintain it well. If there is obvious deferred maintenance, or things look haphazard or slapdash, you'll get unhappy points. The appraiser will think it'll never get any better. It's not the window valances, but the clean, smooth-running windows with no peeling paint that matter.

    This is a big contributor to why mortgage appraisals may fall short of purchase price. The buyer pays up for fine appliances and expensive finishes. The bank doesn't much consider things that will be used up or easily destroyed.

    I doubt the pool liner will make a difference. If it makes you nervous, print out a copy of the receipt and shipping info and prove that it's coming.

    You should get extra value for the pole barn if it's nicely constructed and situated.

    Of course, I could be dead wrong in what I've said when it comes to the appraisers in your area, but Canada Mortgage and Housing Corporation says: criteria range from the square footage and the age of your home, to its
    location, construction quality, architectural features and even the
    number of bathrooms.
    http://www.cmhc-schl.gc.ca/en/co/buho/plmayomo/plmayomo_003.cfm

  • Elmer J Fudd
    8 years ago

    When I said "the house", that includes the land.


  • Elmer J Fudd
    8 years ago

    Yes, get it ready for market. Banks aren't dealing with large volumes as before.


  • redtartan
    Original Author
    8 years ago

    Snidely - We posted at the same time. My comment about land and house wasn't in reply to yours. I understood what you were saying.

  • linda_in_iowa
    8 years ago

    My house was appraised a few months ago when I refied to lower my payment. Last time I refied an appraiser didn't come inside. This time he came in and asked me lots of questions. He took pictures of every room and measured room size with a laser light. He complimented me on every room My front porch was rotting and I told him I would be replacing it. The appraisal came back $22k more than I paid for the house 9 years ago. I haven't done much to it other than new carpet in living room and both bedrooms and painted every room and got a new stove and fridge.


  • User
    8 years ago

    During the recession, foreclosures were typically sold by the bank as is, and priced accordingly often times even too low which was one of the factors driving prices down, but that's another issue. However, once the banks realized this and the market started to recover they started pricing properties more competitively with the market. It was at that point that depending on the area, they would allow some work to take place. In addition to any repairs that they may agree to, they also have to secure the property, turn off the utilities, ensure a property is winterized (area specific) and pay to keep the property maintained while it's listed. Then as the seller, they have several costs to pay towards the sale. Many times the chore of securing, cleaning out and dealing with the utilities are the burden of the agent listing it.



    When a property is appraised little consideration is given to the quality of the interior. They will adjust up or down for say a new roof, or an added bathroom or bedroom, a finished basement vs, non finished, lot size, location ie busy street vs. inside a neighborhood or on a cul-de-sac but they don't care if you have laminant or granite counters, hardwood floors or tile. When you refinance, your house is not only appraised by an appraiser though, often times a Realtor is also hired to do what is called a BPO (Broker price opinion) and that's where the finishes will help because realtors don't adjust the same way an appraiser does and they are valuing the property as if it were to be listed. If the Realtor and Appraiser knows what they are doing, the two prices (appraised value and suggested sales price) usually come in fairly close to each other.

  • chisue
    8 years ago

    How is your property (land and improvements) valued for tax purposes?


    Our county assessor doesn't enter a house. He measures the exterior and totals the square footage of living space (heated/air conditioned space). He notes the size of the garage and the basement -- not the attic or the screened porch. He notes the existence of fireplaces and pools. He lists what the exterior is made of (brick & stucco in our case).The house we tore down had 2 baths; we're still assessed that way.

  • Lindsey_CA
    8 years ago

    "The appraisal wants to see a house that can be evaluated for what it will sell for. "

    Yeah, when a home is being appraised for sale. When it is being appraised for purposes of refinancing the existing mortgage, it's a slightly different story and Snidely was right on. If the house is being appraised for a home improvement loan, it is appraised as if the improvements have been completed.

    plllog, I'm wondering --- what is your profession/past professions? I've ready many of your posts wherein you "speak" as if you are a subject matter expert, and these are on widely varying subjects. So, I'm wondering now if you have ever worked as a real estate appraiser? (And, yes, I had my own real estate appraisal business, but I only appraised residential properties, not farms or dairies, etc.)

  • Lindsey_CA
    8 years ago

    "I was surprised to read up topic about measuring closets and have to think that was the real estate agents. Square footage is generally measured from the outside of the structure."

    Yes, for bank appraisals the residence is measured on the outside and a scale drawing is created. The appraiser must also draw all interior walls, including closets.

  • plllog
    8 years ago

    Lindsey, I was taught to speak positively in my youth, rather than qualifying every statement. It is possible that I learned that (hard!) lesson too well. I do try to say, when it seems appropriate, what background I have. In this case, besides lots of meetings discussing loans, appraisals, leases, exchanges etc., especially with bankers talking about what they're looking for, I've been through it myself. That's not expertise, just some base level experience. I grew up in real estate building and management, plus some general investment management, and still have some to do with it. I have also trained and worked (some shorter or longer and more or less profitably or expertly) as a stage dancer, writer, computer programmer/operator, English as a Foreign Language teacher, writing instructor, artist, art dealer and color design consultant. I have also done small time catering, retail, and graphic design. I am an information sponge and it tends to ooze out.

    No, I have not worked as an appraiser, and gladly defer to your expertise.

  • Jasdip
    8 years ago

    I am an information sponge and it tends to ooze out.

    I love that phrase, Plllog! :>)

  • Lindsey_CA
    8 years ago

    "...bankers talking about what they're looking for..."

    Banks have been known to tell an appraiser that a property "needs to appraise for at least xxx," but if the appraiser hopes to keep his/her license, the value on the finished appraisal will be accurate as to market value. It is the loan underwriters that make the decision as to whether or not to grant the loan, and the loan underwriters are not necessarily the bank or anyone affiliated with the bank. And, generally speaking, in the USA, appraisals are done to FannieMae guidelines.

    FannieMae's definition of market value

  • User
    8 years ago

    Chisue, property tax is assessed based on the permits and inspections during the original build and permits granted for upgrades afterwards. In some areas, the assessor can ask permission to enter a property for reassessment, however (at least in our area) the homeowner has the right to refuse.

  • plllog
    8 years ago

    Lindsey, I missed your post explaining the closet measuring. Thanks for that. No such thing was done when my house was appraised, and I'd never heard of it, but it makes sense.

    When I said "bankers talking about what they're looking for", I didn't mean telling the appraisers how to do their jobs, but discussing, re lending, things like I'd said above of evaluating the "real" part of the real estate and not caring about what the interior finishes are like. I've heard over and over again that it doesn't matter because it all depreciates so fast. That's more about what they do with the appraisal once they receive it, however, and I only have it second hand.


  • cat_ky
    8 years ago

    The reason for a new appraisal, is that the Federal Government has issued a law requiring it now. I dont know when that law took effect, but, I do know it was in effect as early as 2012.


  • Elmer J Fudd
    8 years ago
    last modified: 8 years ago

    pllog, I think you're well intentioned, but to keep control of what you think is a leaking sponge :

    Something that you studied and or worked with in an occupational sense is something you know. Knowledge, understanding.

    Something you heard or observed is just that - something you heard or observed. That's not information or learning. You're repeating what you heard, and the person you heard it from might or might not have themselves understood what they were saying or suggesting. Share that if you want but describe it as such. Don't mix the two, they're very different.

    The very smartest and most capable people I've known more quickly recognize and admit what they don't know, than what they do know. They never mix the two and never speak in a way that could be misinterpreted as suggesting that one is the other when it isn't.

  • plllog
    8 years ago

    This is a social discussion not a professional advice forum. Unless I say I'm an expert, assume I'm not. I assume the same for you. I have similar experience to most of the people who've posted. Discounting learning from people is ridiculous. Discounting learning from experience is ridiculous. Implying that all useful knowledge comes from formal study is ridiculous. I wasn't talking about overhearing a conversation on a bus. I never claimed more knowledge than I possess, but I do have some occupational knowledge of this matter. Certainly not as much as Lindsey, to whom I deferred, but who hasn't said much--perhaps for the very reason that her professional expertise may prevent her from giving an opinion in a minimally informed social setting. I also made sure to differentiate that what I do know applies to my locality and might not in Canada. That's why I also did a little very basic research to see what they had to say in Canada.

    If you don't like what I have to say or how I say it, scroll on by.

  • redtartan
    Original Author
    8 years ago

    I just want to say that I appreciate everyone posting. It's up to me to look at what has been posted and research it further. I do know there is also a slight difference in how appraisals work for farms and residential properties are appraised. When we bought the place they at first only appraised the first 5 acres. They bank then had to have the guy re-evaluate and appraise all 70. I'm not sure if this is the same guy coming back or not. We were only here for the insurance appraisal, not for the bank's appraisal. We'll be calling the guy back today to set up the appointment.

    If we meet appraisal great. If we don't then we just do nothing. We won't do CMHC since the fees are insane and it wouldn't be worth the cost savings for us at that point. We almost have 100 K in equity into the house but we'd like to keep our borrowing at less than 80% of the homes value.

    The highly doubt the house is going to go down in value we've made improvements on the house and property. For what we had wanted the increase was only 6% a year since we bought it. Land values in this went up 20% in 2013 (most recent report) so in theory that should help.

  • User
    8 years ago
    last modified: 8 years ago

    Cat, I haven't been in lending for a long time, and recently stopped doing realtor work entirely but one reason that the second appraisal is probably required by law now is that when the housing market crashed a lot of the blame was placed on the appraisers. An appraisal is supposed to be "an unbiased" opinion and before the crash, lenders (at least the one's I was familiar with) would put a lot of pressure on their house appraisers to make the numbers fit where they needed them to. I personally don't feel the blame was on the appraisers, but as usual, the banks had to blame someone (as opposed to accepting responsibility) for their poor choices.

  • Lindsey_CA
    8 years ago

    In California, when an appraisal is done for a federally related transaction (in other words, if a bank is going to lend money based on the appraisal), the appraiser must have a license in good standing issued by the Department of Real Estate Appraisers. If an appraiser is suspected of "making the numbers fit," anyone who is aware of it (or who suspects it) can file a complaint with the DREA and it will be investigated. The appraiser, if found to have violated any of the rules or ethics, will be fined and may lose their appraisal license.

  • User
    8 years ago
    last modified: 8 years ago

    When I worked in the industry many years ago, in California as well, appraisers were not required to be licensed. Both my ex and one of my best friends were appraisers for different banks and I was privilege to a lot of conversations and information that most people weren't privilege to but I guarantee you, if a lot of loans were declined because values were to low, they heard about it from upper management. The repercussions of those times is why Appraisers are required to be licensed now. I hear comments all the time about how strict lending is but when I was underwriting, Fannie & Freddie guidelines were the norm.

  • jemdandy
    8 years ago

    Things that may increase an appraisal: Proof of installation may be required before the appraiser will include upgrades.

    Items that have been upgraded or replaced within the last 5 years:
    - Roofing
    - Rain gutters
    - Exterior paint and stain
    - Storage shed(s)
    - New, high efficiency furnace
    - New whole house air conditioner
    - Water heater
    - Disposal
    - Carpeting (good quality)
    - Additional electrical circuits
    - Attic insulation treatment: Sealed air leaks, increased roof and soffet vents to new recommendations, added insulation dams where attic meets the roof, added maximum non-deteriorating insulation such as fiber glass.
    - Water proofing outside surfaces of basement walls.
    - Addition of drainage system to carry downspout water away from the house.
    - New concrete driveway


  • chisue
    8 years ago

    Would you let a stranger into your closet with a measuring tape? LOL

  • redtartan
    Original Author
    8 years ago
    last modified: 8 years ago

    So just to update about what they are supposedly looking for is any structural damage or mold etc. This is coming from the bank. One thing I found odd was that my husband asked how long we had to have the appraisal done (that way we'd have 2 weekends to work on kitchen). Bank guy actually said that he was told he should have this wrapped up by the end of the month (which it would be even with delaying) because he was told there was going to be a rate change. He wanted it done asap, though it doesn't need to be. We now know it's just what they want. Then he asked if everything was ok with the house and mentioned they are just looking for mold or structural damage. The thing is even if rates went up, we're good for that rate until July 27th. I hate when people get pushy like that. I think it's more to do with the fact that the longer we wait the more our borrowing amount goes down because more is paid off and less IRD. We've been with this bank for 16 years and this is our second mortgage with them, so I don't like that he's trying to rush us when they approached us in the first place. I do like the bank, we haven't really had any issues with them, but this guy has been a PITA since February.

    Editing to add that I have to wonder if he also gets some sort of commission.

  • User
    8 years ago

    They have NO WAY of knowing what the rates are going to do, there are several reasons he/she could be saying that, but the most likely is a closing bonus. A lot of times if a branch closes x amount of loans in a month, the closing department will get a bonus.

  • redtartan
    Original Author
    8 years ago

    lukkiirish - I know, that's why I found his comment ridiculous. It was obvious that he was lying to my husband. Even if it did by chance go up, we're still locked in too, which made his statement even more far fetched.

  • Lindsey_CA
    8 years ago
    last modified: 8 years ago

    ChiSue asked, "Would you let a stranger into your closet with a measuring tape?"

    An appraiser doesn't often have to go inside a closet, unless it's a big walk-in closet with an odd shape. Our master bedroom walk-in closet, for example, is 110 sq.ft, and there's no way you can tell the size or shape of it unless you're inside it.

    And, for the record, an appraiser doesn't really care if the place is neat and tidy, because although a sloppy house may affect whether or not prospective buyers like the look of the place (or think there won't be enough space for their stuff), in reality your mess isn't going to be (shouldn't be) still there when new occupants move in. Neatness counts when you are showing your home to prospective buyers. For an appraisal, the structure, as noted above, is important. Yes, the quality of the appliances can matter, as a positive adjustment can be made for nicer, newer appliances in an older home. And LittleMonkey3 can tell the appraiser that they are in the middle of a kitchen remodel. The appraiser doesn't need to know how long ago the remodel started or how much longer it will take to finish it (unless they are taking out a home improvement loan). :-)

  • redtartan
    Original Author
    8 years ago

    Lindsey_CA I think Chisue's comment was meant to be a joke as in measuring clothing size. ;)

  • User
    8 years ago

    Yep, I hate liars and it's unfortunate to see someone behave like that. Don't believe him when he says they are only looking for structural damage or mold either. If they were, they'd be sending a property inspector to check the property out not an appraiser. In the banking system, the flow of cash just doesn't work that way. When a lender loans you money, they are using a short term loan they get from the government. (ie the zero percent money they have been borrowing now for years). After they have financed the loan, they then turn around and sell that note to their investor (like Freddie Mac or Fannie Mae) to get their money back so they can pay off the short term loan. That is why you lock in your rate and have to fund prior to a certain date, because they have made a sale commitment for loans with that interest rate that they have to honor. That's why the banks need the loans to close as quickly as possible and offer bonuses to accomplish that. Now, even though they sell the note, most of the time, they accept the responsibility of servicing the loan for a monthly fee (which is why you are never aware that the note has been sold) and you make your payments to them each month. That servicing is how a lender generates income when rates are high and lending is slow. An investor is NOT going to buy a loan unless it has an appraised value to support the loan amount. That property is their collateral, so they care a lot more about the property than that person is claiming.

    Also, if you don't mind me asking, what do you mean when you say you are refinancing but your penalty is going to be low? Do you have a clause in your note that stipulates a prepayment penalty? Because I haven't heard of that in a very long time. Just curious.

  • User
    8 years ago

    By the way, some of the FAQ on this page of FANNIE MAE may be helpful to you if you really want to know some answers to your questions about the appraising of your property.

    https://www.fanniemae.com/content/faq/appraisal-property-report-faqs.pdf

    And I suggest you look at this form, which shows what they look for and adjust for. If you still have it, pull out your old appraisal and look at how the appraiser completed the form based on the information from your property.

    https://www.fanniemae.com/content/guide_form/1004.pdf

    This is a standard Fannie Mae appraisal form used by appraisers.

  • redtartan
    Original Author
    8 years ago

    lukkiirish We have a penalty because we are breaking the terms of the current mortgage that is at a higher interest rate than the new rate we will be re-financing for. We are keeping the same amortization, but we are doing a 5 year term. We currently have 2 1/2 years left on our current term so there is a penalty Interest Rate Differential that we have to pay on the difference between to two percentages.

    By the way after my husband emailed the mortgage guy back to say there is nothing wrong with the property, he just wanted to be there for the appraisal (which is true and earliest date he could get off was 2 weeks from now), husband asked the mortgage guy about how long the rate was good for. He already knows how long it's good for but wanted to see what the guy said given the fact that he tried to imply we needed to rush. The guy never got back to him. This same guy in February was supposed to email us papers and never did. After a few calls to get the mortgage specialist number, hubby called and left a voicemail. The guy never got back to us. So we left it. Then when we called recently and they patched us through to him since he was the one who originally dealt with our application, he had the nerve to blame it on hubby saying hubby never sent in the documents. Hubby of course didn't point out to him that he never bothered to return the phone call. Some people just are not very good at their jobs unfortunately. Any other time we've dealt with this bank or with other banks we've had great people. Actually our first ever mortgage the lady was so amazing we bought her flowers when it all went through.

  • plllog
    8 years ago

    Do they have something like Fanny Mae and Freddie Mac in Canada?


  • User
    8 years ago
    last modified: 8 years ago

    The reason I'm confused is because people refinance ALL the time to lower their rates and these days, it's pretty unusual to see a prepayment penalty. I'm not saying it's wrong, it's entirely dependent on the type of loan you did, but just to be sure, I would double check your note to confirm a prepayment penalty clause is there and what the terms are.

    Refinancing is not a small deal and requires a specific expertise. If this man is lying and/or not doing his job, I would have a very difficult time trusting him with our financing. I might even be inclined to have a word with his manager and insist that a different loan agent be assigned to us.

    This is a little off topic, but figured I'd share anyways, but when I arranged for the loan to purchase our house, the loan rep kept trying to push us into an adjustable rate mortgage. I kept telling him no and insisted we wanted a fixed rate, 30 year mortgage only. On the day we went to sign docs we did it at the office of the Title Company. They get their instructions from the lender ie the loan rep and when they handed me the note to sign, it was for a 30 year Adjustable Rate Mortgage! I know from experience, that based on the conversations a borrower has with their loan rep, they trust the documents are accurate and they'll sign whatever is put in front of them without so much as a glance at what they're signing. And with us at least, the copies we were sent when the origination began, were for a fixed mortgage. Yet if it ends up being wrong at signing, the bank will tell you, you should have read what you were signing, and you are stuck. The commission for an Adjustable Rate mortgage was higher than that of a fixed rate loan and that Loan Rep was banking we wouldn't catch it. Well I did and I was really upset and made them redraw the docs. Since then, I've heard several times that the same thing happened to others in our area who had financed with that company which was a very large industry leader at the time. I can't say I feel bad that they are now defunk!

  • redtartan
    Original Author
    8 years ago

    I'm positive there is a penalty. It's more than the original loan and with a new 5 year term.


  • redtartan
    Original Author
    8 years ago
    last modified: 8 years ago

    Thanks all for the advice about the appraisal. I think there was lots of useful info in there for people in a similar situation to ours. We actually decided we're not going to refinance. We looked at the papers again and realized we had missed a part where he had written a clause that it was subject to the house and 10 acres being appraised for $450,000. Why he put that is beyond me. At 80% of the value that would be a $360,000 mortgage. That is over $20,000 more than what we were seeking. Also he put in only 10 acres whereas we have a little over 70 acres and when our appraisal on the property for this mortgage in 2012 was on the entire property. Totally our fault we missed that. We probably shouldn't have been reading through everything right before bed, but at least we noticed it today. There is no way this house and only 10 acres would go for $450,000. I really don't know what the guy was thinking.