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January 24, 2008
Appraisal Question
Due to the drop in interest rates for conforming loans my husband and i want to refinance our mortgage on our brownstone. We have stellar credit and plenty of income to show but the problem we face is that we are currently in the midst of renovating our house. (doing one kitchen and one bathroom DIY). I was told by my bank that under fannie mae guidelines they can't give us a conforming loan (the balance of our mortgage is just under the conforming limits for a 2 family) if the property has defects that cost 10k or more to cure. Our plan right now is to finish our bathroom (which should take about 2 weeks) and instead of trying to finish the kitchen just put up some sheet rock and maybe prime it. Logically this should work but does anyone know if in reality that will be enough? I guess the question is what state does a house need to be in to pass an appraisal done for a conforming loan? Any thought?
Comments
Well, this is extremely anecdotal, but here goes. In the early 90's we were in a similar situation. Our friends convinced us that appraisers would base the valuation on comps and not need to come inside. They were wrong and we had 2 days to pull our place together before the appraiser came by. We had kitchen cabinets sitting in the living room waiting to be installed, we pushed our appliances into place and bought lots of big flowers (flowering cherry tree branches) to strategically put around the house. We dusted and cleaned as best we could. I can remember the appraiser walking into our totally raw 4th floor and saying, "and what would you call this room?". He was extremely kind and approved us for our lower interest mortgage. Not something you could count on, though.
Posted by: guest at January 24, 2008 11:52 AM
It is my understanding that most banks will not write mortgages on units that have an open Dept of Buildings construction permit.
Posted by: Smokychimp at January 24, 2008 12:16 PM
Im not an expert but I dont think very many people would get a conforming loan if a 10K issue stopped them. I would double check that fact before giving up hope or putting sheetrock up.
Posted by: Mrs. Limestone at January 24, 2008 2:42 PM
and rates are going to continue to head lower
Posted by: daveinbedstuy at January 24, 2008 5:16 PM
I'm a banker and lenders will not do anything other than a construction loan because of possible mechanic's liens from working trades which take priority over bank deeds. Rates will be down for a while so just finish the project and when you are done you will still find a great loan (unless you are talking years to complete!)
Posted by: guest at January 24, 2008 8:12 PM
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