Real Estate
October 18, 2019
link to facebook link to twitter
More Stories
Seven common mortgage mistakes What to expect in today’s loan process? How to use rental income to qualify for a mortgage How to plan the optimal time to buy a rental property The loan process and what not to do Why waiting for mortgage rates to get better is a losing proposition A factor that can drive your mortgage cost up How child support and alimony can affect your ability to get a mortgage What to look for when getting a mortgage on a manufactured home Why getting a 30-year fixed-rate mortgage is a smart financial move How to lower your cash to close when buying a home What you need to know about securing a VA mortgage How mortgage lender credits work Five quirky refinance scenarios that work Two mortgage loan programs get a better interest rate The #1 mistake consumers make when getting a mortgage… Things that affect your first-time buyer mortgage options Be wary about paying off this type of mortgage Best benefit for your first-time home buyer Why the VA mortgage is the best home loan A bank statement program might help get a mortgage Read the fine print Cash-out refinance or home equity Should you refinance with today’s mortgage rates? Should you buy and build or buy a single family home? Don’t make mistakes when getting a mortgage refinance Should you go FHA or conventional for purchasing your first home? Mortgage rate sounds too good to be true Finances matter when buying a home FHA requirement might hurt buying chances How to get a mortgage without providing tax returns The new way to get a mortgage with 1 year income tax returns Four common home buying mistakes to avoid How to create wealth with your income and finances Should you buy a house with monthly mortgage insurance? 2019 conforming loan limits rise FHA loan limits for 2019 increase Working two jobs makes now easier to get a mortgage How much of your mortgage income should be going towards an auto loan? How much are closing costs when you purchase a house? Self-employed income Common questions on financed mortgaged insurance loans A loan program you may be eligible for based on your credit score Can you use roommate income to get a mortgage? Pulling credit may not make sense Cash to payment formula when buying a home Lender knows how to purchase business? Be careful getting a mortgage if you have a bankruptcy How expensive your mortgage will be due to bad credit? A non-traditional program for self-employed mortgage borrowers What you need to know about the mortgage 4506-t document Two mortgage process problems you will want to avoid How the mortgage process gets ugly if you have a difficult picture Could the 30-year fixed mortgage get to 3 percent? Purchase price should not be most important factor Three reasons you should not buy a home Three quirky issues that will hurt your mortgage Why your mortgage payment keeps changing The credit score it takes to get a mortgage How 1031 tax-deferred exchanges work Six to avoid when purchasing a home Mortgage inquiry makes your credit score drop? Transfer property to family and be protected under Prop 13

Home value when refinancing

By: Scott Sheldon
July 26, 2019

When you apply to refinance your house one of the risks you inevitably agree to is your application is subject to a loan to value. Here is how to handle a situation where you value is beneath initial estimates…

One of the things you must have with you when refinancing is a loan to value and determine an appraisal. There is one exception to the rule on a conventional mortgage. It is possible on a case-by-case basis that only the lender might get what’s called a PIW or an appraisal waiver that allows them to do your refinance without needing an appraisal based on automated underwriting results. This would require a credit check and providing supporting income documentation.

If you are desiring to refinance your house and your house does not appraise for what you think it is worth, most mortgage companies will just say that’s the value and leave it at that forcing you to come up with additional options. Here’s what a good lender will do for you. They will go and find and/or request from their appraisal company some additional comparable to do a rebuttal of the opinion of value. Not always, but there are some instances where you might be able to get your value changed based on additional supporting documentation such as work that you did to the property or other comparable that were not originally used in the first appraisal report.

Even a change by as little as $5-7k in some cases can mean the difference between bringing in several thousand dollars to close escrow or being able to finance those monies in the loan amount.

Other alternatives may include:

•subordinating a second mortgage

•changing loan programs

•going from having PMI to having a reduced PMI or no monthly PMI via a prepaid annual mortgage insurance premium

•increasing cash to close

•raising a credit score

•borrowing less

•getting a co-signor

•paying off another debt

Lastly, paying down your principal balance to represent the needed loan to value that you need is an alternative. This is specific money being directed into your principal balance resulting in a lower loan amount which also would result in lower cost loan as you’re financing less money over the total term of 360 months for example.

If you’re unable to complete any kind of a net tangible benefit refinance, cancel the loan. There is a silver lining. The silver lining is that at least with the appraised value you know the value that you have and more importantly how much more value you’ll need in your property measured over the course of time to complete the refinance in the future. Let’s say you need your needs to appraise for $600,000 and the value that you have is $580,000 you know that $20,000 more of equity is what you will need. Based on home sales data in your market that could be an attainable number in six to eight months based on market forces.

Scott Sheldon is a local mortgage lender, with a decade of experience helping consumers purchase and refinance primary homes second homes and investment properties. Learn more at