How Do I Finance a Home Below Appraised Value?

The appraisal is the part of the house buying process that both seller and buyer wait for with equal anxiety. Considering that the appraisal is not done until after you’ve made an offer on the house, the results can be either catastrophic or a pleasant surprise. If the appraisal comes out lower than the amount you’ve agreed to cover your home, the seller will likely reduce the price of the house so that the amount you want to borrow meets the appraised value. Conversely, when a house appraises for more than the seller has approved for the home, the purchaser is in an excellent situation. Few lenders won’t loan money on a home with immediate equity.

Locate a lender if you weren’t preapproved for a loan before making the offer to purchase. Consult your real estate agent to get a referral to someone she’s worked with and finds dependable and honest.

Collect up your financial documents. Lenders generally want to see that your last three pay stubs, tax returns for the past two decades, your last three bank statements and proof of any other income. Create a list of all your bills and the monthly payments. Your lender will supply you with a complete collection of her paperwork requirements.

Make an appointment with the lender to fill out the loan program. You will have to bring your financial documents with you to the appointment.

Await the loan to be accepted. After completing the program and your paperwork will be visit the loan processing department where it’ll be checked over and, even if complete, sent to the underwriting section. The underwriter will order the appraisal and go over it to make sure that the worth of the house either meets or exceeds the quantity you are requesting on the loan program. Considering that the appraisal is higher than the quantity you are requesting, given that your credit and other financial information is suitable, you will be qualified for the loan.

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