Mortgage Refinance: What to Do About a Low Home Appraisal

Broker Handing Over House Keys

You want to refinance your current home loan to secure a better interest rate, but there’s a problem—your mortgage lender is refusing to refinance because of a low home appraisal. Do you still have a chance? While this might seem discouraging at first, don’t give up yet, advises the experts at Community Lending Group. Try these first to get a home refinance in Salt Lake City.

Get a Copy of your Home Appraisal Report

Home appraisers look to various factors to determine the value of your home, including condition, age, size, recent sales, amenities, and current similar listings in your area. Double-check all the things that the appraiser used for valuing your home and if you see some errors, inform the appraiser and your lender.

Take the Appraiser’s Feedback as Objectively As You Can

Inspect your home from the viewpoint of an appraiser or potential buyer. If your home looks like it has seen better days and requires updating and some obvious cosmetic touch-ups, you can’t fault the appraiser for giving you a low appraisal. They make the necessary adjustments and put a plus on the report if you have upgrades or amenities that similar listings don’t such as a swimming pool or gourmet kitchen.

See Which Similar Listings the Appraiser Used

Home appraisal looks to current homes and recently sold homes that are comparable to yours to determine the fair market value of your home. This is the price that a prospective buyer might pay. This holds true even if you don’t plan to sell your home and are just looking to refinance, explains a mortgage broker in Salt Lake City. Your house might be worth more than other similar houses that were sold several months back.

Get the Opinion of Other Professionals

If you have reason to believe that the appraiser used inappropriate or outdated comparable listings, get a local real estate professional to help you out. They would be able to give you a fair market analysis, which you could then present to your lender.

Request for a Second Appraisal

If you have evidence to show that there are more relevant comparable listings that can be used for measuring your home, ask your mortgage lender or broker if it’s possible to get another appraisal.

The Takeaway

If you’re planning to refinance your home, make sure to do ample prep work in advance so that your home will look as valuable as it can come appraisal time. If you don’t agree with the numbers the appraiser gives you, try the suggestions above and keep communication lines open with your lender.