Mortgage refi- appraisal visit?

[Goofygirl17]

I arranged yesterday to refi our existing mortgage with Wells Fargo. There are no points or closing costs so I figured the appraisal would be a drive-by since they already hold our mortgage.

Nope- the appraiser called to make an appt for Friday morning. I'm assuming they'll be coming in the house since they made an appt? Does anyone know what they'll be looking for or asking about?

Thanks!
Goofygirl

 

[akenneson]

They'll probably take a look in all the rooms, take notes on number of rooms bathrooms, the condition of things, what things are made of, say granite counters vs tile, or wood floor vs tile, carpet. They might look around outside the house, note if you have a tar driveway or dirt, different things like that. Then they take their notes and compare your house to similar houses in your area that have sold recently and how much they sold for.

 

[Goofygirl17]

Thanks. That's what I thought. I just didn't expect them to come in since we already have our mortgage with this company. Guess I better get cleaning, huh?

Goofygirl

 

[Malibelle]

We had an appraisal recently and they came in and took pictures and measured eat room. We were surprised. My mom also is refinancing and did the same to her and we are in different states. I think those drive by appraisals are over, plus they appraised it lower than we expected for ours and my moms. I think now they have to be very conservative.

 

[derocas]

I am having an appraisel done tomorrow for the same reason. From what I understand, before you could just use any appraisal but now each bank or lender chooses who they send out to your house.

 

[Darcy03231]

With refinancing your first mortgage they always do an in home appraisal (at least in our area). The only time you might have a drive by is if you're taking out a line of credit and have more than sufficient equity in your home.

 

[C.Ann]

My DD and her DH ran into a bit of a problem with their refi appraisal.. First of all, they sent out two different appraisers - one who was very thorough, one who was not.. The problem arose due to the siding on their house.. (When they purchased it in 2006, it had the old harvest gold siding that is no longer available anywhere..)

Since the day they moved in, my son-in-law has been going through and gutting every single room to the outside walls and replacing everything - including the old drafty windows.. (All heating, central a/c, electrical work, and plumbing has already been completed..) He was planning on residing the entire house in late spring (he tried to refi in Jan. or Feb.), so of course there were areas on the outside of the house that were missing very small sections of siding due to the installation of the new windows..

Long story short, they told him he had to side those small sections with the original siding, or the refi would not go through.. No could do - the original siding no longer exists.. So - he ended up cancelling the refi - is just now finishing up residing the entire house with the new siding and shutters - and will attempt to refi sometime within the next few weeks..

They found no fault with the inside of the house (couldn't if they tried - he did such an amazing job) - but just those small sections of missing siding around the windows dumped the whole deal in the toilet.. So my advice would be to take a look around outside of your home - and make sure everything is as it should be and matches what is already there..

Good luck!

 

[disneyatl]

We just refinanced our house last month and the appraisal was very thorough. The took pictures, measured, looked in the attic, etc. I was told by our mortgage broker that the quick appraisals are definitely a thing of the past due to the mortgage crisis. Too many appraisers were "cushioning" the appraisals to make the mortage work.

 

[ccgirl]

As others said, with the mortgage crisis the banks/appraisers are being very thorough. It worked in our favor. We just remodeled our kitchen with granite counters, custom cabinets etc. The appraiser said that made the house appraise for $15,000 more than it would have otherwise. You heard the cliche that you can't judge a book by its cover - that is what the banks are learning. They want to make sure the inside is "up to par". Good luck!!

 

[Goofygirl17]

Now I'm getting nervous. My husband is re-doing the tile in the kids' bathroom and it's not done yet. The tile in the foyer needs to be replaced (it was like that when we bought the house and we got a reduction in price because of it). He just re-did the walls and ceiling in the master bath but we decided not to replace the tub and tiles yet since he's working on the kids' bath.

I probably shouldn't worry since the market hasn't gone down much here. We recently got our town's re-appraisal for taxes and it had only gone down $10,000 or so since we bought 3 years ago. Plus we have over 20% equity in the house already as long as the value hasn't gone down too much.

Keeping my fingers crossed and cleaning like crazy!

Goofygirl

Also, it seems a little crazy since we already have our mortgage with them, we're not borrowing any more money than we already owe, and we have auto pay every month with extra paid to principal. They aren't taking any more of a chance on a loan to us than they have already taken. It's not like they can take away the mortgage we already have so what's the point?

 

[Avonlady1001]

We had an appraisal recently and they came in and took pictures and measured eat room. We were surprised. My mom also is refinancing and did the same to her and we are in different states. I think those drive by appraisals are over, plus they appraised it lower than we expected for ours and my moms. I think now they have to be very conservative.

We just had an appraisal done for a refi as well. She came in, took lots of pics & measurements. Then ran comparisons to houses that recently sold in our area. Our appraisal came in WAY under what we expected...We knew values were down, but OMG!!! It was much worse than we anticipated, and we had done some improvements (electrical updates, new windows, etc) since we moved in 2 yrs ago.

I am having an appraisel done tomorrow for the same reason. From what I understand, before you could just use any appraisal but now each bank or lender chooses who they send out to your house.

The way my broker explained it, is a new law was passed that the banks can't know who is doing the appraisal. They put in an order for one, and it gets randomly assigned to an appraiser...don't know if that's a NY thing, or a federal thing.

 

[skywaywaver]

Now, for the less sensational version. I would just be very careful of Wells Fargo. They own a company called Rels Valuation which is the middle man between appraisers and Wells Fargo mortgage company. Therefore they choose which appraisers they want to use.
They refused to honor our locked-in rate of 4.75%, with a perfect mortgage. They did two appraisals on our house: one for well over (no way the house was worth that much) and one for well under (and highly inaccurate). Of course they chose the well under one which means we owe more than the house is worth.
We in the process of a refi with somebody else and should have no problems...even though our almost-perfect credit scores took a big hit.

 

[Sanchez]

A lender will always have a full appraisal done in a refinance. In the the past some appraisers would perform "updates" if they had recently appraised the property, however appraiser guidelines (USPAP) do not permit this. It was all part of loosely enforced regulations that led to a rapid escalation in home values (there were many other factors as well.)

Consider that appraisers were often pressured by mortgage brokers to reach a certain value. If the property did not appraise the loan was not issued and the broker did not get paid. Consequently, the broker never sent any more business to the appraiser. Now, lenders are not supposed to pick and choose appraisers. Within the industry everyone knows the appraisers who will "play ball" and get you the value that was needed to get the loan through.

Many appraisers are now facing lawsuits from lenders in foreclosure situations. After foreclosure the lender is not made whole by the borrower and brings a lawsuit against the appraiser for improperly valuing the property. Lenders know that appraisers have E&O coverage and it is likely that they can squeeze some money from the insurance carrier. It is disturbing that lenders who once pressured appraisers to reach a certain value are now suing them for doing just that.

Finally, the appraiser does not set the value of property. An appraiser estimates the fair market value and it is their opinion only. An appraised value of $350,000 does not always mean that you can sell the property for that amount.

 

[Mom of three]

The way my broker explained it, is a new law was passed that the banks can't know who is doing the appraisal. They put in an order for one, and it gets randomly assigned to an appraiser...don't know if that's a NY thing, or a federal thing.

Its a federal thing. It was implemented this year and is referred to as the HVCC. Appraisals need to be ordered either through the lender or a third party that qualified/registered to do so.

I work in the mortgage industry and this has become increasingly frustrating. It does NOT apply however to FHA loans. We do alot of FHA so the impact has been minimal where I am at.

However with regards to the OP concern, the appraiser does not care so much about the cosmetic appearance as he/she does about the structural integrity and overall picture.

HOWEVER....if you are looking at obtaining an FHA loan, they are more stringent and will pick stuff apart. Keep in mind you are looking at obtaining a goverment insured loan and therefore have to abide by their rules. Ive seen appraisers condition for things as little as "exposed wires on doorbell" to things as heavy as "chipped paint on exterior, paint whole house".

In any case, best of luck with everything. I hope it goes as planned.

 

[Goofygirl17]

Okay, DH told me not to stress because there is no way they can appraise this house low enough for us to not qualify for the re-fi. So, I'm trying not to stress Of course I'm still cleaning.

Thanks everyone!
Goofygirl

 

[Goofygirl17]

Thanks everyone.

Momofthree- So they won't care about how cluttery (is that a word?) we are? My projects for the rest of the summer were to go through each room and declutter and deep clean. Now I have 2 days (1 left now) to get it presentable for an appraisal. I really hope they're not going to take pictures. We have so many things we want to do that many are half done or not started yet so things are not put where they're supposed to be.

Anyway, back to trying not to stress!

Thanks again!
Goofygirl

 

[Mom of three]

Thanks everyone.

Momofthree- So they won't care about how cluttery (is that a word?) we are? My projects for the rest of the summer were to go through each room and declutter and deep clean. Now I have 2 days (1 left now) to get it presentable for an appraisal. I really hope they're not going to take pictures. We have so many things we want to do that many are half done or not started yet so things are not put where they're supposed to be.

Anyway, back to trying not to stress!

Thanks again!
Goofygirl

Generally, no. They are looking more at the structure, functionality, and overall picture. They are not going to give you a lesser value because you have dirty clothes on the floor or a messy closet for that matter. BUT...if you have tile torn up in the bathroom and unfinished projects thru out the house, it could be different. I had one borrower who was right in the middle of putting in new flooring in his basement and had not yet decided on what color tile. There was a portion of exposed wood on the flooring where they were "testing" different colors and the appraiser wanted it fixed prior to signing off on it. That was FHA. On the other side of the spectrum I had an FHA appraiser walk right by a broken window and not mention a thing. So it really depends on the appraiser.

Im only speaking from my personal experiences in the industry. Im not an appraiser, Ive just worked with alot of them.

 

[Goofygirl17]

Just one bathroom has no tile on the floor and the tub is tiled halfway up the wall. It's obvious that DH is in the middle of fixing it and we have all of the tile to do it. The tile in the foyer/hallway is cracked and coming up but none of it has been removed yet. The rest is just projects like finishing a play room in the basement (half of ceiling is finished w/ a suspended ceiling) so half the toys are there and the rest are in the living room (can you say toy explosion ). There's a shed in the yard that DH built that is sided 3/4 of the way up but it got wet so he had to wait for it to dry out. That kind of thing.

I guess the rest is just general clutter and I'll try to make it look okay for Friday morning. We need more built in bookcases so there's crates of books around etc.

Thanks,
Goofygirl

 

[DANAW]

Keep in mind that although you may not have to worry that your house will not appraise low enough to kill the deal, a low value would most likely increase the rate you are given by the bank. For example, with some banks the best rate on a conventional mortgage could be given if you borrow 60% or lower of the value of your home. If over 60% to 70% the rate is slightly higher. 70% to 80%, the rate you are given will be higher still. Homes in my area have dropped dramatically. My neighbors house was appraised exactly 2 years ago for $635,000 and just appraised for $515,000/ Ouch!

 

[PinkRhombus]

Ours came to the door, gave us his card, and just looked at the outside.

Said they wouldn't come inside usually unless there were issues with the outside as that usually also means the inside is not being taken care of either.