Getting appraisal on house BEFORE applying for refi?

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Tamarind
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Getting appraisal on house BEFORE applying for refi?

Post by Tamarind » Wed Sep 13, 2017 1:05 pm

Long story short: I own my primary residence JTWROS with my mother. She did me a huge favor by putting down 20%. Once I'm married in the spring, spouse and I plan to get a joint cash-out refi to pay off mom's stake (plus appreciation) and remove her from both mortgage and deed.

Housing has appreciated quite a bit in this area. We bought for $150/sqft and houses nearby have recently sold for $250/sqft, though those were renovated and mine is not.

So I don't actually know how much cash out I need to pay out my mom's share. I don't have a lot of free cash flow because every dollar has a job. If I'm off by a few K I could cover from my emergency funds, but I'd prefer to roll it into the loan given current interest rates.

Question: Should we get an appraisal to get a better idea of value in advance of applying? Will the bank accept that number if it's very close to application date or do I have to pay for two appraisals?

Jack FFR1846
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Re: Getting appraisal on house BEFORE applying for refi?

Post by Jack FFR1846 » Wed Sep 13, 2017 1:08 pm

The bank will only accept the appraisal from the appraiser they've hired. If you're that close, wait a year to avoid wasting money only to be denied.
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midareff
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Re: Getting appraisal on house BEFORE applying for refi?

Post by midareff » Wed Sep 13, 2017 1:13 pm

The bank will get .. and charge you for.. an appraisal from someone that works for them. It will be conservative, perhaps even unduly so. Using an appraisal you have obtained to counter theirs will be time consuming and may not be to your benefit in the end. Seven or eight years ago I did a re-fi from a Chase mortgage to a 3.00% 30 year PenFed fixed. Their appraiser screwed up and copied the square footage from a one bedroom when I have a two bedroom in another line in my condo. The bank wanted a couple extra $K down to do the refi and in the larger scheme of things it mattered more that I didn't run out the time lock on the 3.00% 30 year fixed than argue about a couple K that I had readily available to pay down the amount mortgaged to get the deal closed.

I think you would be wasting your money to get an appraisal yourself that the bank or lending company won't use.

JBTX
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Re: Getting appraisal on house BEFORE applying for refi?

Post by JBTX » Wed Sep 13, 2017 2:11 pm

midareff wrote:
Wed Sep 13, 2017 1:13 pm
The bank will get .. and charge you for.. an appraisal from someone that works for them. It will be conservative, perhaps even unduly so. Using an appraisal you have obtained to counter theirs will be time consuming and may not be to your benefit in the end. Seven or eight years ago I did a re-fi from a Chase mortgage to a 3.00% 30 year PenFed fixed. Their appraiser screwed up and copied the square footage from a one bedroom when I have a two bedroom in another line in my condo. The bank wanted a couple extra $K down to do the refi and in the larger scheme of things it mattered more that I didn't run out the time lock on the 3.00% 30 year fixed than argue about a couple K that I had readily available to pay down the amount mortgaged to get the deal closed.

I think you would be wasting your money to get an appraisal yourself that the bank or lending company won't use.
Not sure I totally agree. On the various refi appraisals I've gotten, they've never seemed unreasonable or too conservative. In fact, they will do a multi similar property comparison of comparables. And the amounts generally exceeded the property tax assessor model, which also is based upon recent comparable sales.

Ultimately, the bank wants to do the deal. If they have appraisers torpedo'ing their loans that is bad for business.

I do agree getting your own is a waste of time. Look at Zillow value (which will likely be a little inflated), look at other recent sales on zillow of comparable homes in neighborhood. You should get a decent estimate.

piperkub
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Re: Getting appraisal on house BEFORE applying for refi?

Post by piperkub » Wed Sep 13, 2017 2:42 pm

Try talking with a Realtor friend and ask for a broker appraisal and maybe a list of local comps to supply to the appraiser when he views the property. Also, there are some on line appraisal calculators to get rough idea. But as said earlier, the bank has to request the appraiser to view the property. Since it is already paid for, consider a equity based home loan for a shorter term. If you are considering a large purchase soon, you may want to include it in you finance plan as well. It would make a car loan tax free and probably cheaper.

Tamarind
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Re: Getting appraisal on house BEFORE applying for refi?

Post by Tamarind » Wed Sep 13, 2017 4:46 pm

piperkub wrote:
Wed Sep 13, 2017 2:42 pm
Try talking with a Realtor friend and ask for a broker appraisal and maybe a list of local comps to supply to the appraiser when he views the property. Also, there are some on line appraisal calculators to get rough idea. But as said earlier, the bank has to request the appraiser to view the property. Since it is already paid for, consider a equity based home loan for a shorter term. If you are considering a large purchase soon, you may want to include it in you finance plan as well. It would make a car loan tax free and probably cheaper.
The equity based home loan would be clever and I can see the appeal, but rates would be a good deal higher than what I could get on a refi. Suspect the higher interest would be more than throwing away the cost of the appraisal to right-size my application. No large purchases planned soon as we will be buying used cars with cash and no car replacement expected any time soon.

Thanks for the suggestion on broker appraisal. I do have a friend who is a local agent.

wfrobinette
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Re: Getting appraisal on house BEFORE applying for refi?

Post by wfrobinette » Thu Sep 14, 2017 10:14 am

Jack FFR1846 wrote:
Wed Sep 13, 2017 1:08 pm
The bank will only accept the appraisal from the appraiser they've hired. If you're that close, wait a year to avoid wasting money only to be denied.
True but the way I understand it is that the banks don't have much of a choice who they get. It's a round robin next one up kind of thing now.

My last refi came in lower than 20% down. Either pony up cash or accept a 1/4 point raise in rate to 3.625 and have no PMI. I chose the higher rate which was still cheaper than the 4.25 i was at.

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