Trouble finding comps for appraisal on refi - question!

stretchadFebruary 24, 2009

I spoke to my mortgage broker a couple weeks ago about refinancing the home we purchased last May (we put about 10% down on purchase price). The broker told me that she spoke to an appraiser and that the appraiser was unable to find any recent home sales in my neighborhood that would work as comps. There just haven't been that many homes for sale since people are just really staying put. She thought that if we did submit an appraisal with old comps, or homes a bit further outside my neighborhood that underwriting might likely reject it, and my appraisal fee would be down the drain. She suggested waiting until this spring/summer when more homes have sold.

I'm not sure how many homes will sell in my neighborhood come this spring, since there still aren't very many up for sale. Would you risk the appraisal with underwriting? Or would you wait?

I should add that I've got a 6% rate currently.

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I'd ask your current servicer if they'd simply modify the note in lieu of a full refinance.

Try it.
Dave Donhoff
Leverage Planner

    Bookmark   February 24, 2009 at 11:19PM
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Can you call around and identify an appraiser ? Or why not ask the bank to find another appraiser?

    Bookmark   February 25, 2009 at 6:13AM
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I would tell the bank to get another appraiser, or move on to another bank. There are hundreds out there. They should be begging for your business. You or her do not know where rates will be this summer. And what if still no homes sell? Her solution is rediculous.

Dan, are loan modifications reported to the the three credit agencies in one form or another? Most short sales are, as I was told.

    Bookmark   February 25, 2009 at 8:17AM
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Loan Mods aren't derogatory to credit at all. Missing payments are (which is what leads to short sales...) but not modifications.


    Bookmark   February 25, 2009 at 12:14PM
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We just finished doing this and encountered the same problem. In our case the bank (a small credit union) was willing to expand the area from which they drew the comps to pick up enough....but for us that meant that the house appraised well below even our worst case scenario since expanding that boundary picked up the edge of a neighborhood on the other side of the freeway that's been very badly hit by the downturn. (Of course when we asked the *county* to redo their appraisal in light of this, they rightly pointed out that the comps the bank used weren't actually in our neighborhood, and based on the one comp that was, the value of our house was substantially higher than its appraisal, and we would be taxed accordingly....figures! ;) We were fortunate to have enough equity in the house that we were able to move forward anyway by paying a small amount to keep the LTV at 80%, but it was definitely frustrating. Since we plan to stay in the house whatever happens to the value and we were bringing the interest rate down 1.25 percent which yielded pretty sizable savings in our monthly costs, it still seemed a worthwhile investment. (Also, there were a lot of sunk costs involved since we didn't get the appraisal figure till after we'd paid most of the fees....nonrefundable of course!) I don't think the bank would have accepted older comps, though, given the current trends.

    Bookmark   February 27, 2009 at 8:25PM
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