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My1sthome, Home Buyer in San Diego, CA

Can the required 2nd FHA appraisal affect financing, ie. increase APR if 2nd appraisal values the home for $1,000 more than the 1st appraisal

Asked by My1sthome, San Diego, CA Thu Jun 16, 2011

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Answers

1
A second appraisal coming in higher has no effect on financing. The lender will use the lower of the contracted purchase price or the appraised value. If there are 2 appraisals done, they will use the lower appraisal to base loan to value on. None of this effects APR.

Example Scenario 1- Offering lower than appraised value

Purchase Price = $300,000
Appraisal #1 = $305,000
Appraisal #2 = $306,000

20% down = $60,000 (based on purchase price of $300,000)
Loan amount = $240,000
_________________

Example Scenario 2 - Offering higher than appraised value

Purchase Price = $300,000
Appraisal #1 = $295,000
Appraisal #2 = $296,000

20% down = $64,000 (based on lower appraisal of $295,000)
Loan amount = $236,000
Web Reference: http://WeFixRates.Com
0 votes Thank Flag Link Fri Jun 17, 2011
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