My husband and I have two mortgages that we tried to refinance into one loan with a lower rate.

Asked by Andrea, Des Plaines, IL Thu Sep 10, 2009

We both have excellent credit, and don’t have a problem making the current payments, we just wanted to save some money.
The problem is that our appraisal came in at $58k less than what we currently owe. We spoke with a local real estate agent and checked with some websites that estimate your home’s value. Both indicated that our house was worth slightly more than what we owe. Is there any way to dispute the appraisal?

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Jeff Tung Jr, Mortgage Broker Or Lender, Tracy, CA
Fri Sep 18, 2009
Most residential appraisals are based on comparable sales. With the new laws keeping mortgage brokers and lenders from contacting the appraisers, it's hard to get a clear idea why the appraisal didn't come in to where it needs to be. Sometimes the appraiser can update the appraisal with newer or better suited comparables. In areas that have low turn over, I've heard of appraisers using pending sales to come to a value. If the loan is already in submission, then what the other gentleman (Michael) was saying will most likely be true. If the lender has seen the low appraisal then they will only lend on the lower of the two. One, being purchase price, and two, the appraisal; in this situation the appraisal is the lower of the two. You may have to submit the loan to a different lender.

One side note however, " was worth slightly more than what we owe." based on the loan program you may run into qualifying issues based on your LTV (loan-to-value).
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Nike (Nikki)…, , Beverly, Chicago, IL
Thu Sep 17, 2009

If your first mortgage is an ARM or a high rate, you can get an FHA loan to reduce the payment on it and leave the Second mortgage open, so long as the appraisal covers the value of the 1st mortgage. The FHA loan allows you to refinance a 1st mortgage without considering the balance of the second mortgage, even if their combined balance is more than the value of the appraisal.
Your other option is to work with a Mortgage Broker versus a bank. We offer a larger variety of Lenders and programs, and can oftentimes locate an option that will achieve your goal of reducing payments.
I am always available to work with you and would be happy to do so.

Nike Fasanya, CMC
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Michael Hump…, , Winchester, VA
Thu Sep 10, 2009
First you can contact the appraiser and see what he has to say about it. Often time websites dont have the most up to date information about sales. If you still do not like his answer you can get another appraisal done. Most likely you will have to use a different lender because once that lender sees the lower value they probably will want to use that one no metter what a second appraisal has to say
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William Pola…, Mortgage Broker Or Lender, Suwanee, GA
Thu Sep 10, 2009
I'm not licensed in your state, but you are welcome to call me for information (770) 255-3831 (Atlanta). So here is some information that might be helpful:

FHA: As long as you haven't used the 2nd mortgage in the last 12 months, you may use up to 97% of the value of the home. You may ask "But my appraisal came in much lower". Yes. However, you probably had a conventional appraiser and the lender cannot control the outcome. I'm not saying that an FHA appraiser is going to be any better, however, he/she can communicate with the lender/Realtor and get more information about the area/house etc. The FHA appraiser will work harder for the value whereas the conventional appraiser is getting paid half as much for twice the work due to a new guideline from May 1, 2009 which requires banks to go thru a management company to order appraisals.

Conventional: Fannie and Freddie allow you to go up to 105% of the value of your home to refinance only the first mortgage, however, you may be able to get into an ARM at a lower rate (5 to 7 yrs) or a lower fixed rate. As of Oct 1, 2009, Fannie and Freddie will allow up to 125% of the value. So far, no banks have been takers
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Martine Wirt…, Agent, Cherry Grove, OH
Thu Sep 10, 2009
Who paid for the appraisal? If you paid for it, I'd ask the appraiser to give you the details of what they added or subtracted to get their results. Check the dates the comparables sold. Since the market is what it is, banks are being very conservative about lending. They only loan a percentage of what the value is, so if the appraisal wasn't high enough they won't do the loan. Try to contact the bank and see if they can do anything else to help. Most banks are working with people now. You can get another appraisal, and if it comes in higher, then the bank may use an average of the two.
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