# 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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Gregorio Den…, , San Diego, CA
Fri Jun 17, 2011
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
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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
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