Mortgage Qualification Problems – Low Appraisals

Low appraisals is an odd mortgage qualification problem in the US real estate market. These are options you can consider should you get a low appraisal amount.

The effort of a qualified person putting a value on a property is called an appraisal. In this process, a review of the property, other properties in the area is involved. Appraisals are always required by mortgage lenders and if you’re going to get the home, you’re going to have to deal with the appraisal problems.

Let’s assume you have perfect credit, make a ton of money and are ready to put down a solid down payment. You and the lender are both happy is getting the appraisal is the only thing left to do. However, coming in well below the price you have agreed to pay for the home is the appraisal. What do you do now?

Take a deep breath first. Buying a home is an emotional process. Try to step back from the process and objectively analyze whether you are paying too much for the property. If you decided to proceed, then take the appraisal to the seller to check if the price can be lowered. You need to be prepared to walk away if a solution is not possible.

It’s also possible that in the neighborhood, the fair market values of properties are dropping. You’ll notice this in your particular neighborhood as the market cools off. Then you should be thankful to the appraiser if that’s the case because you’ve been kept out of a bad deal.

There’s also the chance that the appraiser may be wrong. We’re all humans so mistakes are natural. It’s possible that the neighborhood is not something they’re familiar with. There are a variety of reasons you can get an appraisal that is “off.” If you suspect this is the case, check to make sure the appraiser is comparing the property to comparable homes in the neighborhood. If all else fails, have your own appraisal done for comparison purposes.

Low appraisal should serve as a warning to you. If nothing else, you should take a closer look to make sure you aren’t getting a bad deal.

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