Posted on: 28th May, 2009 11:05 am
My wife and I live in far NW suburban chicago and have a 1750 sq-ft brick house that's about 55 years old. Our 5-year ARM will adjust in November and we are trying to decide whether to refi or not (current rate is 4.625% and can adjust up to two points higher in any given year).
I contacted our current lender a couple months ago about a refi and he said that it would require a full walk-through appraisal, using an appraiser hired by the bank. Between our 1st mortgage and our HELOC we are very close to what we think is the full loan to value of our house, with about $19K left to spend in the HELOC.
What we are struggling with is trying to figure out, with the limited cash we have left in the HELOC, what repairs we should make prior to the appraisal if we decide to refi. There are some external issues like crumbling concrete stairs on the front porch and some limited tuckpointing, as well as some wall tile in the bathroom that has come off. We also have ugly raw wood floors (not hardwood) up in the 2nd floor office from where it used to be an attic.
How closely is an appraiser going to look at these things and downgrade the value, and what is the cost-to-value ratio of getting some of these things fixed? We don't want to rack up any more debt than we already have since the LTV is already high, but we want the best possible appraisal price. For example, is it worth spending $1,600 or more on tuckpointing cracked mortar on the side of the house that most people walk by without noticing?
We are thinking about hiring someone to come out and give us a pre-appraisal or home inspection before any bank appraiser comes out, so that we only need to fix up the things he/she is going to care about. We recently spent about $30,000 of the HELOC to remodel the kitchen so hopefully that will be reflected in the pricing. Our last drive-by appraisal about three years ago gave us a high range of $257K and a low range of $209K. We owe $123K on the primary mortgage and $50K on the HELOC.
I contacted our current lender a couple months ago about a refi and he said that it would require a full walk-through appraisal, using an appraiser hired by the bank. Between our 1st mortgage and our HELOC we are very close to what we think is the full loan to value of our house, with about $19K left to spend in the HELOC.
What we are struggling with is trying to figure out, with the limited cash we have left in the HELOC, what repairs we should make prior to the appraisal if we decide to refi. There are some external issues like crumbling concrete stairs on the front porch and some limited tuckpointing, as well as some wall tile in the bathroom that has come off. We also have ugly raw wood floors (not hardwood) up in the 2nd floor office from where it used to be an attic.
How closely is an appraiser going to look at these things and downgrade the value, and what is the cost-to-value ratio of getting some of these things fixed? We don't want to rack up any more debt than we already have since the LTV is already high, but we want the best possible appraisal price. For example, is it worth spending $1,600 or more on tuckpointing cracked mortar on the side of the house that most people walk by without noticing?
We are thinking about hiring someone to come out and give us a pre-appraisal or home inspection before any bank appraiser comes out, so that we only need to fix up the things he/she is going to care about. We recently spent about $30,000 of the HELOC to remodel the kitchen so hopefully that will be reflected in the pricing. Our last drive-by appraisal about three years ago gave us a high range of $257K and a low range of $209K. We owe $123K on the primary mortgage and $50K on the HELOC.
Hi dayers!
Welcome to forums!
You can go for a pre-appraisal which will let you know what factors would be taken into consideration by the lender of the bank to fix the price of the property. Home improvements will definitely add to the value of your property. Remodeling the kitchen will also raise the price of the property.
So, in my opinion, it is a good idea to go for a pre-appraisal.
Feel free to ask if you have further queries.
Sussane
Welcome to forums!
You can go for a pre-appraisal which will let you know what factors would be taken into consideration by the lender of the bank to fix the price of the property. Home improvements will definitely add to the value of your property. Remodeling the kitchen will also raise the price of the property.
So, in my opinion, it is a good idea to go for a pre-appraisal.
Feel free to ask if you have further queries.
Sussane
How much should we expect to pay for a pre-appraisal?
Unless there are certain deficiencies which affect the livibility, soundness, or structural integrity of the dwelling, the appraiser will most likely consider the overall condition in comparison to the market. Minor cosmetic deficiencies may not have a significant impact unless there are several which impact the opinions of the overallcondition.
Just because I am picky about terms, I need to tell you there is no such thing as a pre-appraisal. Any opinion of value from an appraiser is an appraisal. I only wanted to let you know before you begin calling appraisers and asking for a pre-appraisal, only to be met with a great deal of questions and head scratching.
As far as the cost, it will vary greatly depending on the scope of work and the level of experience held by the appraiser. Your best bet would be to contact a few appraisers and tell them your situation in detail so that they can develop the right appraisal product for you. They may be able to let you know the value of the property "as is" as well as what it would be worth after certain repairs. Keep in mind that the more you ask the appraiser to do, the more research that is involved, and the cost of the appraisal will go up. Since I am not familiar with the price of appraisals in your area, I couldn't even tell you an accurate range of what to expect other than the cost can vary greatly. One piece of advice, not all appraisers are equal. Don't automatically go with the cheapest just because it is the cheapest. It is important to ask about the appraisers credentials and go with the one that seems to have the highest level of competence and market knowledge. This will truly help you in the end.
Best of luck!
Just because I am picky about terms, I need to tell you there is no such thing as a pre-appraisal. Any opinion of value from an appraiser is an appraisal. I only wanted to let you know before you begin calling appraisers and asking for a pre-appraisal, only to be met with a great deal of questions and head scratching.
As far as the cost, it will vary greatly depending on the scope of work and the level of experience held by the appraiser. Your best bet would be to contact a few appraisers and tell them your situation in detail so that they can develop the right appraisal product for you. They may be able to let you know the value of the property "as is" as well as what it would be worth after certain repairs. Keep in mind that the more you ask the appraiser to do, the more research that is involved, and the cost of the appraisal will go up. Since I am not familiar with the price of appraisals in your area, I couldn't even tell you an accurate range of what to expect other than the cost can vary greatly. One piece of advice, not all appraisers are equal. Don't automatically go with the cheapest just because it is the cheapest. It is important to ask about the appraisers credentials and go with the one that seems to have the highest level of competence and market knowledge. This will truly help you in the end.
Best of luck!
There is no such thing as a pre-appraisal.