Episode 062 - Purchase and Refi Values are the Same, Right?
I am sure you have seen it and or had the question posed to you: Why is my refinance appraisal value so much different than the appraisal value from my purchase? It doesn’t make sense does it? Is there some policy or requirement that makes them different? The short answer is no, but the long answer may surprise you.
In this episode, Brian talks about why there is a difference and things to look for when this issue comes up.
Cate’s side note tangent, if you are reading these notes and happen to notice, Brian messed up (it’s his one time allotment per year). He said this was episode 61, not 62. If you are one of the first 10 people to call him out on via email, he will send you a $5 gift card to Starbucks. That will teach him!
SHOW NOTES
- 00:50 – What are purchase appraisals and refi appraisals different? B doesn’t know. They shouldn’t be but we know they are.
- 01:43 – Here are a few reasons: purchase has a “target” number, which is the purchase price.
- 02:36 – Lender’s perspective is only concerned about is if the property is worth at least what the home is being sold for. Some appraisers look at the purchase price as the target.
- 05:10 – Not a good reason, but a reality.
- 05:25 – Refinance appraisals do not have a target. Refi for rate or term or remove PMI. Your home is worth what your home is worth.
- 06:20 – Some appraisers rely on the purchase price as a crutch and if they don’t have it, they don’t know the value of the property.
- 06:50 – An example of where a refi value number is worth questioning.
- 08:29 – Having a target can be a big reason for the value disparity.
- 08:58 – Appraisers get push back from lender. Underwriter didn’t like data or the report, so they might “cut” the number.
- 09:30 – Not good answers, but the answer nonetheless.
- 10:00 – Not all appraisers are the same either and understand the process.
SHOW LINKS
BETWEEN THE LINES LINKS
Email
brian@brianclee.com
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https://www.youtube.com/channel/UCcv4dHU39-b5_QVVCIhbcBA?
