Asked by Lee Chase, Wells, ME Thu Jun 14, 2012

Our home currently has no mortgage. We applied for an equity loan since the house is dated 1865 and in need of serious repair. The bank approved us for $80k, provided their assessor came back with an appraisal similar to the town's assessment of $174k. The bank's assessor came back with $130k. The bank backed out of the equity loan, stating that our home was not "of any value." HUH??? They won't give us the $80k 12-year loan to repair the house, but they said they would consider giving us a $150k 30-year construction loan... We can't afford that. This makes absolutely no sense to me. Please help me understand!

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Ron Thomas, Agent, Fresno, CA
Thu Jun 14, 2012
There certainly is more than one Lender in the world:
Your experience with that Bank sounds absurd.
Don't give up!

Will the $80,000 do everything you want plus a safty margin?

Good luck and may God bless
0 votes
Yes, the $80 was also going to pay off all of our outstanding debt, buy my husband a vehicle, and completely repair everything that needed to be done.
Flag Thu Jun 14, 2012
Dale Doughty, Mortgage Broker Or Lender, Falmouth, ME
Thu Jun 14, 2012
What was the appraiser's concerns? Why did the lender want you to do a construction loan for so much money? Were there specific structural items that need to be addressed? Please email me or call my direct line at (207) 894-5822. I may be able to help you.
0 votes
Patricia "Pa…, Agent, Wells, ME
Thu Jun 14, 2012
Hi Lee,
Sorry to hear about this equity loan nightmare situation you are going through. It doesn't seem fair at all, but I can tell you that the current appraisal of a property may very well not match the current town assessment, especially if the assessment was done a few years back when the selling prices of homes were considerably higher. It's not much comfort, but you certainly are not alone in this situation where equity loans are tougher to come by for the very fact that the home may not appraise "high enough" or have enough equity in it to draw against it. I can't imagine why the bank would state that there "is no value" since you bought it and have no mortgage on it. It has the value of what it can currently command in today's market which, according to the bank appraiser is $130,000. If you need recommendations for expert, local lenders and mortgage representatives, please give me a call at 207-251-4566. I'm sure they could help you sort out the truth. Pat Aureli, Broker, Coast & Dream Properties
0 votes
We wanted to do the work ourselves, to keep costs down, and my husband is a contractor, so he is very knowledgeable and capable. But with a construction loan, we would have to hire contractors, which would increase our costs immensely.
Flag Thu Jun 14, 2012
This is what baffles me. The town's assessment was done May 2012, resulting in $174k. The bank's assessment was done this week, resulting in $130k. No current mortgage on the property. We're asking for $80k. They said with the equity loan we could borrow up to 80% of the value. Now they are saying they wont give us an equity loan for any amount! But they will give us a construction loan? It doesn't make any sense.
Flag Thu Jun 14, 2012
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