When you’re in the process of buying a home and seeking a mortgage loan, the bank will typically order an appraisal to determine the value of the property. This appraisal is crucial because it helps the lender ensure that the home is worth the amount they are lending you. But what happens if the bank appraisal is low? Let’s delve into the implications and potential outcomes of a low bank appraisal.
**What happens if bank appraisal is low?**
If the bank appraisal comes in lower than the agreed-upon purchase price of the home, it can have several consequences. The most common scenarios include:
1.
Can I still get a mortgage if the bank appraisal is low?
If the bank appraisal is lower than the agreed-upon purchase price, the lender may not be willing to provide a mortgage for the full amount you need.
2.
Will the seller lower the price if the bank appraisal is low?
In some cases, sellers may be willing to negotiate and lower the price to match the appraised value.
3.
Can I make up the difference if the bank appraisal is low?
If you’re still set on purchasing the home, you can choose to make up the difference between the appraised value and the purchase price with your own funds.
4.
Are there any options for challenging a low bank appraisal?
You can request a reconsideration of value or provide additional comparable sales data to support a higher valuation.
5.
Will a low bank appraisal affect my ability to refinance?
A low bank appraisal can also impact your ability to refinance your existing mortgage, as lenders typically require the property to appraise at a certain value.
6.
How does a low bank appraisal affect the closing process?
A low bank appraisal can delay the closing process as negotiations may need to take place to determine a solution.
7.
Can I get a second opinion on a low bank appraisal?
While it’s uncommon, you can request a second appraisal from the lender or choose to pay for an independent appraisal.
8.
Will a low bank appraisal affect my homeowners insurance?
A low bank appraisal typically does not impact your homeowners insurance directly, but it can affect your ability to secure adequate coverage.
9.
How does a low bank appraisal affect my down payment?
If the appraisal comes in low, you may need to increase your down payment to match the percentage required by the lender.
10.
Can a low bank appraisal lead to a cancelled sale?
If the seller is unwilling to lower the price or you are unable to make up the difference, the sale may be at risk of cancellation.
11.
Will a low bank appraisal affect my credit score?
A low bank appraisal typically does not impact your credit score, as it is based on your credit history and payment behavior.
12.
Can I appeal a low bank appraisal?
While it is possible to appeal a low bank appraisal, the success rate is generally low unless there are significant errors in the appraisal report.
In conclusion, a low bank appraisal can present challenges in the home buying process, but there are options available to address the situation. By understanding the implications of a low bank appraisal and exploring alternative solutions, you can navigate through this obstacle and potentially still secure the home of your dreams.