Approved!! - And now the Appraisal (loan, loan, property, bank)

[Esanzs]

Does anyone have an understanding of how RBFCU calculates their appraisal?

I need help understanding the Appraisal process.

The cost to build my home will be 182K.

I purchased 2 ac in 2006, that I still owe 28K on.

It has been explained that my land is what the appraisal will be based on? Is this correct?

The bank explained that they will take the cost to build the house (182K), and the appraised value of my property, and they will then only lend me 80% of that total.

I always understood that the appraised value was on the combination of both an appraised value of the house and an appraised value of the land.

I am getting a deal on the house ($70 psf), and I had hope that the house would bring in additional (appraised) value to the loan.

[VictorBurek]

yes, the value of your home will be based on the value of the home and the land together.

[dad2jules]

Add the caveat that loan to value is determined by the lower of appraised value + contract price. The land is key because the most you can get is 80% of the build price of $182k.

[ETex2]

Originally Posted by VictorBurek

yes, the value of your home will be based on the value of the home and the land together.

This is true, but it does not necessarily that the market value is equal to the sum of the two parts. The market value should reflect what the market will pay for the land and house as a single unit, which could be more or less than the sum of the two parts.

"RBFCU", whoever that is, should not have a different method of appraisal, since most lenders (or the Appraisal Management Co. they use) hire an outside licensed or certified appraisal to do an appraisal that meets standardardized appraisal criteria.