Ack, Home Appraisal tommorrow...

Miscellaneous and Personal Stuff I Must Share
1

and I’m really nervous about it.

I’ve been meaning to refi for about a year. Last week I checked the rates at my bank and they were at 3.99% (4.125 APR), I’m currently at 4.95%, so I finally pulled the trigger and put it in motion. My credit is spectacular, I keep an eye on so I know how my report looks, but the bank sent me a copy of the score and it was 816 out of a possible 818.

I was worried about my income. I’m on disability right now from some surgery I had a few months ago. My pay is 50% of what it should be, but worker’s comp kicks in the other half so I’m still getting paid about the same (less just a few dollars). My banker said that shouldn’t be a problem since it’s temporary and it’ll go back to normal soon, they’ll just verify with my employer that I’ll go back to getting paid my full wages when everything is done with this. Shouldn’t be a problem there.

As for the home appraisal, that’s where I’m concerned, it’s the reason I didn’t do this a year ago. When I refi’d in 2010 it came back at $189,000. Right now I owe $134K. Add in some fees and the appraisal has to come back at $168000. The banker is hoping for $172K. A 10% drop in the value of my house since 5 years ago (which is probably the case) and every dollar matters.

I’ve done no upgrades since 5 years ago. A few days ago I did a few things that I know I would have been dinged for. I put some drywall back up on the ceiling on the basement. I took it down trying to track down an HVAC issue. That in and of itself isn’t a problem (I don’t think), but the hardwired smoke detector was just hanging there. I got it back up and mounted the smoke detector properly.

Yesterday I spray painted the trim around the skylight in my bathroom. It’s a one story house and the skylight is roof height so it’s up in sort of a tunnel. The trim was rotten and falling apart. I just hit it with a couple of coats of white Kilz, just enough that a quick glance won’t make someone ask if the roof leaks.

Cleaned a black (mildew probably) spot of the corner of the ceiling in one room. No idea how that got there.

I took the plastic sheeting off of two windows. All my windows are crap (contractor grade) and they’re all drafty. In winter I put plastic on the two worst ones. It dawned on my that having that on them (and some foam stuff on ALL the windows in between the sashes) would be a dead give away that the windows need to be replaced.

Finally, last time I had it appraised they mentioned the peeling paint on the fascia boards on the front of the house, I finally repainted that today. I think they dinged me $500 for that.

Oh and did I mentioned that I put drywall on my ceiling, worked over my head in my bathroom in that little skylight tunnel and painted about 25 feel of fascia after surgery…shoulder surgery. This better pay off.

So, it could come back at close to the first number and that would be great. Hell, anything over 170K or so and I’m in the clear. Even a few dollars under and I can bring some cash with me to make up the difference, I’m okay with that. What I’m really worried about is that it’ll come in so low that it’ll just have been a waste of time and money. For example, if it comes back at $150,000. I don’t have 15k to bring with me to make up the difference.
I’m really hoping this works. Right now I pay about 125 over each month. At the new rate AND paying the same as what I’m paying right now, I’d be paying $250 over. At my current rate, I’d have my mortgage paid off (at status quo), 4 years early…2036, at the new rate it would be 12 years early or 2033. So not just early, but in a tight month I can back off and have extra money. Plus I’ll probably wait a few months before I start making extra payments just to reimburse myself for the fees I’ve had to pay upfront already. I have the cash, but, might as well…unless I end up getting to skip the first month’s payment like I did last time I refi’d.

Zillow has a ‘zestimate’ of $165k, I’m not sure if the appraiser looks at that at all.

Also, should I give the appraiser a copy of the old appraisal? I’m thinking not, but I’m not sure.

Lastly, and this is something I’ve always wondered about…since I’m not planning to sell my house any time soon, should the city be given a copy of this? My taxes are based on what I paid for the house in 2005. I mean, if it comes back at $170,000, and the city is assessing my house at one ninety something, should I try to get my taxes lowered or is that now how that works?

2

How’d it go. Did you get any numbers yet?

3

She said it would take 2-3 days and she would email a report to the banker (who will call me I assume). At 1:00 in the morning I remembered that I had an electrical violation in the basement that would have taken me hours to fix so I just hid it. My dishwasher, when we installed it, we just dropped the electrical through the floor, into a closet in the basement, put a plug on it, ran it into the next room and plugged it in…to be finished later, that was like 10 years ago. So I ran down there, again at one in the morning, and half closed the door so she could stick her head in (which she did) to see the closet, but not see the wire hanging down (which she didn’t).

Beyond that, it was all just normal stuff, she asked me about all the stuff I’ve done since I moved in so I mentioned everything I could think off. Added two ceiling fans, new (good) stove, replaced the water heater, replaced the garage door opener, added a nice raised garden (that looks like it’s part of the house), stamped patio, door out the back of the attached garage into the backyard, fence to close off the backyard etc. Most of it is on the last appraisal as well, but she wanted to know everything so I listed it off as we walked around.

After she left, I was wondering if I should call he to tell her that I also added gutter guards. Just the plastic ones you get from Home Depot, but they save me a ton of time cleaning out the gutters. I didn’t, I’m sure she gets tons of those calls and I didn’t want to be one of those people. Hopefully I don’t miss the target by $500.

It would be great if I hear back tomorrow, but I’m guessing it’ll be Monday or Tuesday.

4

Keep us posted, and get some sleep tonight.

5

I was in the same spot a few years ago! I was super nervous as well - I needed it to appraise at $157k in order for everything to work perfectly. The change in mortgage would also save me about 4 years with my extra principle payment.

When the guy came I was like “Did you see the deck? Gotta see the deck!” (thank goodness it was new - now it’s sort of coming apart) “Have you seen my shed?? What a shed!”

I think I even told him that this was all super important to me and I really needed it to be $157k.

In the end the appraisal came back right at $157k. Seemed kind of shady to me but I didn’t care. I got the appraisal I needed for the re-fi I needed for the lower payments and shorter mortgage. Yes!!

Hope you do as well as me :slight_smile:

6

I showed her everything I could think of. I wished I had thought to slap a coat of paint on the shed. Not even the whole shed, just the trim, the part the you can see when you look into the backyard from the house. I had the paint in my hand.
I also wished I had done this about two weeks earlier when everything was still covered in snow. The patio is really nice, but needs a coat of concrete paint in some spots. Hopefully it just looked to her like it needs to be hosed off, which it does. The roof is in really good condition, but it’s also 19 years old. Again, 6 inches of snow on it, would have made sure she couldn’t even look at it. OTOH, maybe her being able to see that the shingles still have granules on them and they aren’t curling is better than guessing at what condition it’s in and just writing down '20 year old roof probably needs to be replaced soon".

Also, I have this feeling all this person did was take measurements, jot things down and snap pictures and that someone else will do the actual assessment. It just didn’t seem like she asked enough questions. I guess I’ll find out when I see the report.

7

Stop second-guessing yourself, you’ll drive yourself crazy. From your OP, it seems you fixed a lot of things that mattered, and it’s out of your hands now, so relax.

8

I think appraisals are a lot more casual than we think they are. It seemed to me with my appraisal that the person worked for the bank and the bank did want my business (great credit rating, always paid on time, big enough of a loan for them to make some dough, closing costs in hand) so it was worth it to the appraiser to hit the mark.

No way my house was worth $7k more than I bought it for, 5 years earlier. I had bought it in 2005 at the height of the bubble so you know it was over-priced. I didn’t do anything but paint it, do landscaping and add a deck & shed. And now it’s worth $7k more?

I doubt it. But it was worth it for the bank to say it was.

9

Yeah, the appraiser isn’t looking for what your fixtures look like, how old the stove is, whether your wallpaper is ugly, etc. They want to know how big the house is, how many bedrooms & baths, so they can find comparable houses that have sold recently so they can come up with a value based on that. Every appraisal I’ve gotten included a list of similar houses to mine that have sold in neighboring towns.

They’ll note if there are giant gaping holes in the floor or something clearly wrong that will negatively affect the value, but they don’t care if the paint job is fresh or old.

10

I’d be shocked if your house wasn’t worth more now than in 2010. The market was terrible in 2010 and if you don’t have any major disrepair I would think it would go up significantly in value. Of course it depends more upon the neighborhood you are in, but Zillow showed mine being valued at $172K in October last year and the appraiser came back with a $210K appraisal. I paid a $162K in 2010.

Let’s us know how you come out, but I suspect you are just worrying too much.

11

Interesting points. I’ve been under the impression that appraisals were mostly done using large data sets of similar sales and that minor specifics of your home are typically of no consequence. Even if you have 5% more backyard than 95% of homes in the area, the appraiser would typically see that as an inconsequential variation and still treat your home as equivalent to others rather than say that your “extra” land area was worth exactly $X per square foot.

To what extent is it actually possible to engineer (i.e. skew) an appraisal in the direction you want by altering things, repairing them, damaging them, tearing them out, installing new stuff, etc.? E.g. say you are hoping that your home appraises for above $350,000 so that you can qualify for a country club membership. Right now, it’s at about $345,000 and you have $50,000 in the bank to spend on home improvements. Could you get it up over the limit by adding gold faucets? A home theater system in the basement?

12

If I had $50,000 and wanted to be sure I got a 5K bump, I’d probably put on a new roof, replace the windows and put in a new furnace and maybe put in a deck or patio or something. That’s all stuff that would make the selling price higher and all things that you’d have to pull permits for so the appraiser would know about it before they even got to your house.

In fact, I plan to put on a new roof in the next year or two and I really considered pushing off the refi until after that. Pretending a roof costs 4k, do I spend my 4K on a new roof to push the appraisal up, but then not have the extra money if it doesn’t make it high enough OR, keep the money so if the appraisal comes in just barely under I can bring the cash with me to the closing.

My hope is that I won’t need the money for the closing and I’ll still have it for the roof project. But if I need it now, so be it, and I’ll start saving up again. My roof is in fair shape, I’d just like to replace it before it’s a problem, not scramble for a new one after it becomes an issue.

13

Follow-up?

14

Still waiting. They told me it would take two to three business days, but when I asked my banker a few days later she said they [the appraisal people?] had a two week back log. In the mean time the interest rate has fallen from 4.125% to 3.821%. I’m working under the assumption that I can’t change it without, at the very least, paying a new $400 application fee. About a year and a half to get back to where I am now (a savings of $24/mo) and I’d still have to cover all the rest of the closing costs. Basically, the whole thing, from beginning to end, will cost about $1700. I’m not sure if I want to add another $400 to drop my payments by $24…and the interest rate could drop again.

Looking online, there’s something called a float down where a lender can lower your rate after you’ve locked in but they usually charge some kind of fee and they usually won’t do it unless the rate has gone done significantly.

15

$181,000. [Wipes sweat off brow].

$9,000 over my target. So, while all the little stuff I did around the house probably didn’t make or break me*, I was still close enough that it might have, I don’t know, but I’m glad I didn’t do anything major like put a new roof on the place.

I just got this in the mail yesterday so I’m assuming my lender will probably give me a call Monday or Tuesday (or wednesday or thursday) and will start getting this finished up.

I’m kind of annoyed that the rates have gone down a third of a point since I locked, but thems the breaks I guess. Last time I asked her about that (it had gone up since the time I called her and the time we locked) she said ‘it’s only a few dollars’ but I reminded her that I was saving $100 a month so the extra $10 cutting in to my $100 is quite a bit.
*Whether it came it at $172000 or $181000 or 220000 doesn’t matter, it’s a pass or fail test.

16

Good for you! One less thing to worry about.

17

That’s it, it’s all smooth sailing from here. My credit is spectacular*, I’ve signed off on everything and paid some of the fees. All I’ve got to do now is sign off on the rest and pay the rest of the fees that they get to surprise me with. I’m sure they’ll ask me to roll them into the mortgage, but I’d rather just pay them upfront rather than pay interest on them for the next umpteen years.

*There was one thing with my credit I was worried about, but it turns out it was nothing. All my credit ratings, the ones the bank sent me that they used, were just a few points off the highest possible rating.