What if an appraisal comes in too low for my equity loan?

What if an appraisal comes in too low for my equity loan?  Find out here what you can do if your home’s appraisal is too low for a HELOC!

Due to the economy, many homeowners are struggling to pay their mortgage and other recurring expenses.  To raise cash and give themselves some temporary financial comfort, many homeowners are trying to get an equity loan.  Unfortunately, many appraisals are coming in too low for individuals to get cash out of their homes.  Luckily, if an appraisal comes in too low for any equity loan, there are things a homeowner can do.



Contest the Appraisal

If an appraisal comes in too low for an equity loan, the first and cheapest step a consumer can take is to contest the appraisal.  Appraisals are largely based off of recent sales and listed homes in the area.  If the comp set seems weak compared to your home, you can find additional comps that may better compare to your home.  You may also discuss each comp in the appraisal and say why it is worth less than your home.

Order New Appraisal

If an appraisal comes in too low for an equity loan, you may also order a new appraisal.  Different appraisers have different valuation methods.  A new appraiser may look at other information that the original appraiser over looked.  This new information could result in a higher appraised value which can be used for an equity loan.

Renegotiate Equity Loan

If an appraisal comes in too low for an equity loan, the last option is to renegotiate the equity loan.  Most equity loans require no less than 20% equity in the home, but it is possible to get an equity loan that allows less equity.  While a lender may allow less equity, they in turn will charge higher fees and interest.



Leave a Reply