Comparable Home Prices
by Might Dump My Bank
Comparable Home Prices and Refinancing: Hi Kate, I am thinking of dumping my bank. I am trying to refinance my mortgage through my bank on a 15 year fixed rate mortgage at 3.85%, down from 5.375.
Continued... My house has been appraised by two different independent appraisers at the same value. I paid $340 to the bank for one independent assessment. The city in which I live uses an appraisal firm out of Cedar Rapids to do valuations for tax purposes.
Both matched almost exactly.
I have locked in a rate which will expire in a few days. But now my bank is denying my refinancing contract due to no comparable sold properties.
I have had several loans through the same bank - 1 paid off car, 1 paid off property, and current mortgage and car loans which I have never been late on.
By refinancing to a 15 year fixed mortgage, my monthly house payments will only go up by $100 a month. But it also knocks my loan term down by over 5 years.
Is this real? Can they deny me? My mortgage amount is approximately $40,000 under the valuation price. Please advise ASAP.
Kate Answers: Comparable Home Prices
***zz-portrait-left.shtml*** Dear "Might Dump My Bank",
Yes, the bank not only CAN, they most likely WILL!
Banks can and will decline mortgage refinance applications due to a lack of comparable sold properties.
Appraisals Require Comparable Home Prices
Here's the thing about residential appraisals. They are primarily based on comparable home prices.
One component to arriving at an appraised value, at least three other similar home sales must be available. If homes are not selling or are selling at reduced prices compared to prior years, then an appraiser often cannot arrive at sufficient appraised values to accommodate homeowner needs.
Underwriters can think outside the box when it comes to certain aspects of loan approval. For example, if debt-to-income ratios exceed guidelines, a mortgage underwriter can request a car loan be paid off with cash proceeds from the refinance.
But what can an underwriter (or for that matter, an appraiser) do if similar homes are currently selling at lower values or not selling at all?
I wish I could wave my magic wand and send you a solution but this is a nationwide crisis affecting homeowners from coast to coast.
Regardless, I hope you will still take a look at my 7 tips for getting the highest property appraisals
, vacation home under appraised by the bank
and home appraisal tips
One more thing. I'd like to hear back from you. Let me know if this page was helpful to you. Comment on Comparable Home Prices
. Or Ask Kate another question here
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