New Constructions and Appraisals

mriandra · August 2011

We just got our appraisal back for our newly built home. Unfortunately, our post appraisal came in about $2000 under than the original appraisal done before the construction of our home. When we took out our construction loan it was based on a financing of 80% of the original appraisal. Now, that our appraisal came in under what we were originally appraised, how does this affect us? Do we pay the $2000 difference to the bank or will we need to refinance(?) our loan and once again repay closing costs of an even higher price of $2000?

Sorry, I am paranoid because our loan officer kept on ingraining into our heads that our post construction appraisal needed to meet the original appraisal value - or else!

d0ri · August 2011

It means your permanent loan can only be 80% of the final appraisal. For instance, if the original appraisal was $100k and the final is $98k, then the bank can only loan you $78,400 instead of $80k. You just have to come up with the difference. Or, ask for a 2nd appraisal (but you may have to pay for this).

nsfw · August 2011

d0ri:
It means your permanent loan can only be 80% of the final appraisal. For instance, if the original appraisal was $100k and the final is $98k, then the bank can only loan you $78,400 instead of $80k. You just have to come up with the difference. Or, ask for a 2nd appraisal (but you may have to pay for this).

Or ask the builder to lower the price. (Ours did).

emjacobs13 · August 2011

Our appraisal was about $2,000 under builder price. We wouldn't come down at all since we had already gotten him to come down $9,000 and add a washer and dryer into the appliance package. It was explained to me that if we had financed (we didn't, cash sale) then we would have had to bring the difference to the table. We basically got it appraised for piece of mind and general curiosity.

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