I called my credit union Friday, and they said they could refinance me at three-point-something for 15 years. About $2,800 closing costs, which I can include in the loan. I’m not sure how much I’m paying now, but the new mortgage payment would be about the same as (or less than) I’m paying now on my 30-year, 5.325% loan.
I need to fill out an online application, they’ll send me a package of paperwork, and arrange an appraisal (which I will pay out-of-pocket). When I bought the house, the seller handled the appraisal and the inspection.
Someone will come out and inspect your house. They will be looking at things like how many square feet of living space is in it, what condition it is in, etc. Basically they’ll be looking at anything that affects the value of the house. Then they will compare it to other similar houses in nearby areas to come up with an approximate market value for your home.
An appraisal is not the same as a home inspection. They aren’t going to be looking for signs of termite damage or plumbing problems or things like that unless they are obvious. If you’ve done work on the house they’ll probably take a look at it to make sure it was done properly, but they aren’t going to do the same sort of in depth examination that you’d get from a home inspection.
When we bought our house we originally had a 30 year loan. A few years into it we refinanced for a 15 year loan at a lower rate. Back then it was fairly painless, but it was also more common back then for the folks handing out loans to work with appraisers who were known to be a bit generous with their appraisals so that there would be no problem with the new loan going through. Housing prices were rising pretty quickly back then too. These days, with housing prices being what they are, the lenders may be looking for a bit more strict appraisals.
I wouldn’t worry too much about it. Someone will come in, take a look at everything, ask you a bunch of questions, and then some time later you’ll get a report saying what your house is worth. Usually the appraisal will state exactly how they came to that figure as well.
The bank will choose the appraiser. You just have to pay for it.
Just to clarify this a little bit, the bank or CU isn’t required to automatically give you a copy of the appraisal. They are required to either give you a copy, or give you notice that you can request a copy of the appraisal.
Granted my experience dates back to 1999, but I never got a copy of the appraisal report. No one ever stopped by to ask me questions, though that might be different in today’s market. Hell, I’m not sure the guy even actually drove by the house. All I know is that I got a bill in the $500 range and I was told everything was fine for the loan, so I paid it and the process moved forward.
Oh, I’m not worried about it. The house is about 1/3 paid for, and according to zillow.com it’s worth about 60% more than my purchase price. The CU will loan 80% of appraised value. I just like to know what to expect.
I did renovate one bedroom, I got a new wood-burning stove, and replaced the French doors the front door, and the doors on the back bedrooms. (One of these days I’d like to install an exterior door on the master bedroom.) I’d like the appraiser to take note of those. I suppose I should get the yard guy to come out before the appraiser comes.
I am not sure if the rules are different on refinancing versus straight purchase, by my wife and I bought our house in January and the appraiser was chosen randomly from a pool of appraisers located in the area. This was done to eliminate the “friendly appraiser” which was contributing to the rapid rise in home prices during the bubble.
Some banks will only do a drive by appraisal and in that case you don’t get called in advance. In my last case they did come in our house and look around. My guess is now with all the problems they do more cases where they come in and look around.
I last went through a real appraisal (not drive-by) in 1992, but they guy never set foot in the house. Just measured outside and poked around. This was the second appraisal for me in WA state, and both time I got a copy of the report. Might be a WA regulation but I’d ask for it, just to be sure.
A number of years ago SWG drive bys were common. But it ended coming back on the appraisers. I know of one case where the appraiser gave a high appraisal, and the bank made a loan baised on it. The bank ended foreclosing on the home. After they did the repairs the bank could only sell the home for $100,000 less than the appraisal. They went after the appraiser and collected. This was before the bubble burst.
What an appraiser should do is come out to the house. Measure the size. note things like pool, spa, solar, and soforth. Then he tries to locate at least three other simular homes in the area that have sold lately. Then he sets up a spread sheet compairing the homes. He will add or subtract from sale price depending on differance. Ie if your home has solar heating he will add $1000 to the value. After the math he comes up with three numbers and from that he makes his valuation baised on sales.
You get not credit for work you are going to do and you will get nicked for incomplete work.
I had my home appraised a month ago, and somebody did come by and looked around the place. I had heard that laws have changed (not sure how recently, I have no cite) that required the appraiser to be from an approved company, and before that it was not unusual for the appraiser to be hired by one of the agents involved in the sale and appraise the property for whatever was needed to move the sale forward.