Home Appraisal for a Mortgage Question

[Wishing on a star]

Once, many many eons ago, in my former life, I worked in finance and mortgages.

The thing is, the appraisal is necessary for the lender in order to validate the amount of the loan. If there is no current appraisal, yes, they will require one, before they make the loan.
'Closing costs' are not charged, settled, and paid until the sale and loan closes. Not all proposed sales close. If the appraisal is not paid for, the lender would be left with this cost that they really should not be. Either that, or the appraiser provides services and gets stiffed.

Also, as mentioned... I would not want any more $$$$ than necessary sitting there and accruing/charging interest for all of those years. It only makes sense to cover as many of the costs, and make make as much of a down-payment, as possible.

Disney Junky, 'closing costs' may be a common term, but can be a misnomer. Specifically, things like the mortgage processing fees, realtor commission, etc... things that are actually charged and payable at the time the mortgage actually closes (or they are not charged and payable at all) would be true closing costs. Earnest money, Appraisals, Inspections, etc.. are commonly due and payable to the providers of these services up front.

 

[disney junky]

Once, many many eons ago, in my former life, I worked in finance and mortgages.

The thing is, the appraisal is necessary for the lender in order to validate the amount of the loan. If there is no current appraisal, yes, they will require one, before they make the loan.
'Closing costs' are not charged, settled, and paid until the sale and loan closes. Not all proposed sales close. If the appraisal is not paid for, the lender would be left with this cost that they really should not be. Either that, or the appraiser provides services and gets stiffed.

Also, as mentioned... I would not want any more $$$$ than necessary sitting there and accruing/charging interest for all of those years. It only makes sense to cover as many of the costs, and make make as much of a down-payment, as possible.

Disney Junky, 'closing costs' may be a common term, but can be a misnomer. Specifically, things like the mortgage processing fees, realtor commission, etc... things that are actually charged and payable at the time the mortgage actually closes (or they are not charged and payable at all) would be true closing costs. Earnest money, Appraisals, Inspections, etc.. are commonly due and payable to the providers of these services up front.

OK. Call them costs to close.

 

[Disneybuckeye]

No matter what you call them they still have to be paid. In our case they are a waste of money. I can't justify paying $500 for an appraisal when we could sell the place tomorrow for 1.5 times what we wanted to mortgage. All the title insurance, title searches, etc. were just done two years ago when we bought the old dump. We paid for everything in regards to the new build in cash and I have the receipts. It is like overpaying for the boat by $1k. We will have the money to pay cash for it in a year or two. To me that is the better decision.

 

[disney junky]

No matter what you call them they still have to be paid. In our case they are a waste of money. I can't justify paying $500 for an appraisal when we could sell the place tomorrow for 1.5 times what we wanted to mortgage. All the title insurance, title searches, etc. were just done two years ago when we bought the old dump. We paid for everything in regards to the new build in cash and I have the receipts. It is like overpaying for the boat by $1k. We will have the money to pay cash for it in a year or two. To me that is the better decision.

Would there be transfer tax? That's the only one that comes to my mind, but I'm not sure if that's a PA thing.

 

[Mickeyluver37]

This is just my experience, but we bought our last house from MY PARENTS. We had an appraisal done so we could all agree on terms, and then involved a lender.

Lender would not accept original appraisal that still had wet ink. Independent appraisal required- their new one actually came in 5K higher than the one I had just paid for. And the contract was written that parents were paying 100% of closing costs. WE STILL had to pay $400 for the appraisal up front (which is $100 more than it should be so I assume they take a cut as well), they wouldn't just add it to closing. I figured we would just not hear about it again, but because it did go on the sellers side of the closing sheet, we walked away with $400 reimbursed at closing.

I agree the whole thing is silly, but the mortgage industry is so heavily regulated now.

 

[Wishing on a star]

Well, Disneybuckeye, a mortgage does come with some costs.
Just the way it is.
If you are saying you want to use a mortgage to get a boat, instead of some other type of loan, then that's not anyone else's problem or responsibility to make that happen the way you might want/think it should.

I am not sure which might come out best in the end... A different loan with the higher interest rate, over the number of years, or just pay these additional costs up front to get the lower interest.

 

[Disneybuckeye]

Well, Disneybuckeye, a mortgage does come with some costs.
Just the way it is.
If you are saying you want to use a mortgage to get a boat, instead of some other type of loan, then that's not anyone else's problem or responsibility to make that happen the way you might want/think it should.

I am not sure which might come out best in the end... A different loan with the higher interest rate, over the number of years, or just pay these additional costs up front to get the lower interest.

I agree a mortgage comes with costs. The last time we bought a house with an appraisal was 25 years ago and we paid for it in cash at closing. Paying up front via credit card was new to me and I was curious if others had to do this. I had no intention of rolling any of the closing costs into the mortgage.

After reviewing all the costs involved we decided obtaining a mortgage on the house was not a smart financial decision at this time.