Understanding how the appraisal process works will give you the best chance of getting an appraiser to assign the highest possible value to your property. “That means, in most cases, it must appraise for at least the amount of the loan,” said Than Merrill, real estate investor and founder of FortuneBuilders, a real estate investment education company. If you confirm errors in the home appraisal, the next thing to do is contact your lender to appeal the appraisal. But sometimes it's a blessing in disguise for buyers. Bankrate.com is an independent, advertising-supported publisher and comparison service. “That’s your best bet to improving your appraisal value.”. “What’s more, it’s entirely possible that a home [can increase] in value after [it] was appraised.” Have your realtor do some research and find out if this applies to your home. “If the homeowner does not like the value of the appraisal, they can write a letter of appeal to the lender or AMC, but the chance of an appraiser changing his or her opinion is very slim unless the homeowner has overwhelming evidence that the value is off,” says Benton. They have to make sure the trend is going to continue.”. If your home’s value is so low that you’re underwater, you can’t refinance. The mortgage lender usually orders the appraisal and is required by federal law to provide a copy of the report to the buyer only, according to the Bureau of Consumer Financial Protection. To get a copy, you can contact the buyer through his agent. You can learn more about the standards we follow in producing accurate, unbiased content in our. HARP (Home Affordable Refinance Program), which had offered government assistance to homeowners who were underwater, expired at the end of 2018.. These offers do not represent all available deposit, investment, loan or credit products. If home values continue to rise, you can later provide comparable sales to your mortgage servicer and ask it to remove PMI, even if you have not yet paid down much of your principal. “But if there’s a bad appraisal, by all means you should get a good valuation,” Creech says. If you’ve made additions or improvements to your home and didn’t get building permits you might have an issue regarding the value. But this doesn’t have to happen to you; find out what you can do get a satisfactory home appraisal so you can sell for the best price possible. If the appraisal reveals that you’re underwater, however, all you can do is wait for the market to improve, unless you qualify for a program such as the High LTV Refinance Option from Fannie Mae or a Freddie Mac Enhanced Relief Refinance. If you kept your downpayment at $50,000, this means you’d be covering the difference in the appraised value ($10,000), and then the other $40,000 would mean a downpayment of 17 percent. Appraisers are expected to follow the Uniform Standards of Professional Appraisal Practice issued by the Appraisal Foundation, a professional organization, though these standards are not law., Appraisal fees vary by state, but appraisers must charge customary and reasonable fees for the area. “Your property should be neat and clean, uncluttered, and easy to inspect. “Using an AMC is not a requirement, but that is the common approach to appraiser independence,” says Joe Parsons, senior loan advisor at Pinnacle Capital Mortgage of Dublin, Calif., a regional banker, and mortgage broker., Many lenders—especially small, local ones—have direct referral relationships with a small group of individual appraisers and may not use an AMC. Interest Rate Reduction Refinance Loan (IRRRL), The FHA Streamline Refinance Program Explained, 12 U.S. Code 3353. Federal Housing Administration’s (FHA) streamline refinance, If you think you've been discriminated against, U.S. Department of Housing and Urban Development, Consumer Financial Protection Bureau's mortgage calculator, A Consumer’s Guide to Mortgage Refinancings. Rate-and-term refinance refers to the refinancing of an existing mortgage for the purpose of changing the interest and/or term of a mortgage without taking additional cash out. Merrill’s advice is to talk to the appraiser about these improvements or upgrades in a way that is more informative than condescending. FDIC. If the property later goes into foreclosure for any reason, the lender wants to be able to resell the property and get its money back.. Polyana was a real estate reporter at the Daily Business Review for about five years. Therefore, this compensation may impact how, where and in what order products appear within listing categories. But freshening up the home’s paint, both inside and out, can help, as can clearing away clutter to allow full access and viewing of all areas of the home, including the basement.