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We bought our home in 10/09 and Wells Fargo financed our loan at 5.25%. Rates dropped a year later and we did a no-cost refinance, again through Wells Fargo in 11/10. The house went up in value from $625k to $660k. Our rate dropped to 4.875%. In 10/12 I started the refinance again and locked into a 3.875% rate.
Our trouble is after the appraisal (which actually brought our value up to $830k), the underwriter is now mandating we do improvements to the property to finalize the loan based off of the appraiser's report.
We did not have a garage door on our 2 car garage, so we had to spend $1000 to get a door quickly installed. Now we are told our heat source is considered inadequate for the "market." We have a gas fireplace insert that heats the area we use the most just fine (and cost us $3000), but the underwriter wants us to put in another heat source for our 1400 square foot home.
Everything else is in order (LTV ratio, income, credit), the house is in good condition, and we are 10 days away from our closing date.
THe underwriter is protecting their investment. If you foreclose, can they resell the house? Would the average buyer want a "real" heat source and not just a fireplace? Probably. Would the average buyer want their house and belongings protected by having an actual door on the garage? Probably.
Yes, the underwriter can ask for these things as you're asking for money from them. They hold the money, they hold the decisions.
We bought our home in 10/09 and Wells Fargo financed our loan at 5.25%. Rates dropped a year later and we did a no-cost refinance, again through Wells Fargo in 11/10. The house went up in value from $625k to $660k. Our rate dropped to 4.875%. In 10/12 I started the refinance again and locked into a 3.875% rate.
Our trouble is after the appraisal (which actually brought our value up to $830k), the underwriter is now mandating we do improvements to the property to finalize the loan based off of the appraiser's report.
We did not have a garage door on our 2 car garage, so we had to spend $1000 to get a door quickly installed. Now we are told our heat source is considered inadequate for the "market." We have a gas fireplace insert that heats the area we use the most just fine (and cost us $3000), but the underwriter wants us to put in another heat source for our 1400 square foot home.
Everything else is in order (LTV ratio, income, credit), the house is in good condition, and we are 10 days away from our closing date.
Yes, the underwriter is must make sure the home is: up to code, safe, and habitable for year round use.
You could fight the requirements by having your garage converted to a carport (would require zoning to agree and apprasial re-worked) and have an HVAC contractor warrant the unit is working adequately. It would be cheaper to fix the two.
The underwriter didn't just pull these two items out of thin air. There was an appraisal that either made comments to this warrant these requirements or they were a condition of the value issued. (By the way, value has absolutely zero impact on any repair that is code, habitability, or safety related - zip, nada).
Lenders are having a tough time relaying the fact to Realtors and potential buyers that major investors continue to tighten down all requiremens, property and borrower related.
I beleive Fannie Mae/Freddie Mac require a heat source in every room.
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