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Devastated - need some advice
Our FHA loan was just denied because the appraiser didn't do his job. He originally sent in comps that were houses of similar size but only sat on 2 - 4 acres - the house we are purchasing is on 25. When the underwriter came back and said they wouldn't work, he told them after an exhaustive search, there were no other properties in the area that could be used as comps.
Our realtor and bank loan manager were able to find four different properties that could be used but the underwriter refused to accept them because they didn't come from the appraiser and they denied our loan.
So my question is, can we try a different bank? I know that we have to fill out the form asking if we have been denied a loan in the past couple months, so what do we say? It has nothing to do with our finances, we are in a perfect place to purchase a home.
Our loan manager said in his 32 years, he has never had this happen. So glad we get to be the first...:(
Re: Devastated - need some advice
I don't know, but I think the underwriter/loan manager should have some options for you. Are they still working on it and trying to figure something out or find a different lender?
...baby #3 is here...
Was the loan denied because the use of inappropriate comps led to a low appraisal number? Or was the loan denied because the underwriter decided there were no appropriate comparables to use to determine the value of the property, and therefore the appraisal cannot be completed?
In the first scenario, where inappropriate comps led to a low appraisal, Ithink that low appraisal will stick to the property for 6 months. This means that any FHA loans on that property would need to consider that low appraisal number. In this case, your only option would be to switch to a loan that is not government-backed, like a conventional loan. Can you qualify for a conventional loan?
In the second scenario, if there was never an official complete appriasal, I'd give it a try with a different bank. No official appraisal means nothing in the official file that will stick with the house. I'd be very upfront with the loan officer and see what he/she says. It doesn't hurt to try. And if you can qualify for a conventional, the appraisal process may be a bit less onerous, so explore that route, too.
Good luck!
Our loan manager said that the appraisal would still stick will the property though so we can't go another route. We are looking into a conventional but I don't know if we can afford it.
My Blog
Two things I can think of - 1) Use another bank. 2) Ask your loan officer if he can submit the comps to an appraisal review board.
We are in a different situation (we're refinancing) and the comps that the appraiser pulled are crazy and our house appraised less than we needed it to and less than it should have. I asked our loan officer if we could contest the appraisal and he told me to ask a realtor to pull some comps for us and he'd submit them. I had our realtor friend pull a few (with some suggestions of homes I knew sold recently) and submitted them to our loan officer who passed them along to the appraisal review board. We're still waiting to hear how that's going but I thought maybe your bank has a similar review board and would be either fine with the smaller land comps or would include your larger parcels as comps.
Use a bank that deals with more rural customers - like farmers. They are accustomed to large spreads of land and can act accordingly.