Good News - reappraisal questions

What we've learned about reappraisals and refinancing our home:

1. Shop around for a home loan and get them competing with each other. We did our homework and made plenty of contacts. Have found much better results, better interest rates and better contracts with an independent mortgage broker than going through a financing firm. Dec. 2001: Company A offered us 6 3/4% interest and $7,000 closing costs, then poured on the pressure to sign! sign! sign! Up went the red flags! We contacted an independent mortgage broker, who found a contract at 6 1/4%, $4800 closing costs, and more flexible terms. With the still falling interest rates, we decided to do it again - April 2003. Company B offered us 5 1/4% and either 15 or 30 yrs, but the same independent broker came back with 4 7/8% at 11, 15, 20, or 30 yrs.

2. Check out the appraiser, and don't accept an appraisal that you believe is unrealistic. Get another one. Company A sent us an appraiser who works for them, who appraised our house far below what we thought it was worth - $95,000. When we rejected Company A's offer, and contacted the independent broker, he sent another appraiser - this one also an independent who works for several companies - this guy took a little longer (about 2 weeks) to complete his report, but came back at $150,000.

3. Get a walk-through appraisal first - about $75 cost in our area. This brief appraisal is not adequate for the mortgage company to formulate a contract, but the appraiser will tell you what you need to do - fix the front porch, replace the fuse box, whatever... so you will have a definite list of To-Dos before the actual appraisal, which runs about $350 in our neighborhood.

4. Concentrate on structural problems instead of decorating pretty. Appraisers will give you more points for a solidly-built floor with old dingy carpets than they will for a weak, uneven floor with brand-new carpet. Even if you have a structural problem that you can't fix before the appraisal, get started on it. He'd rather see a repair in progress, and may give you full credit for it, than if you did nothing at all. We had a half-bath upstairs, and intended to make it into a full bath - but plumbing for the tub had not been done yet. We set the bathtub temporarily in its place, and had the pipes, faucet and drain laid out ready to be installed, and we got credit for a full bath. Also, we wanted to build a deck on the back of the house, but ran out of time before the appraisal. Because we had already purchased the lumber, installed the backplate and set the posts, and had building plans, he gave us full credit for a finished deck.

5. Then, hide or mask what you can't fix right away. (Sounds dishonest, but you do what you gotta do). We have problems with a leaky foundation in the basement, and had done some excavation to enlarge parts of the basement, leaving bare earth walls in some places (egads!) No time or money to pour concrete foundation walls before the scheduled appraisal, so we put up studs and wall panels to hide the mess (fake walls, so-to-speak) - to buy us time until we could do the job right. It worked (!) and we got credit for a full, finished basement.

Good luck!!! It sounds like you have reached a milestone - I'm so happy for you!

Msfit