Question on appraisals before a refi? (loan officer, interest rate, 2014, property tax)

[chris288]

Hey guys first time poster here just here asking for some advice on a refinance I have been working on for over a year. I have borrowed on CC and paid cash to add a very large addition onto my home. This has increased the value and now with the prior equity and the added 1000 square ft. thats been added I want to refi and pay off the cards to a lower rate than I have.

I have also done improvements along the way, new much bigger deck, new roof, new windows, etc. The big question I ask you guys is because of finances I am strapped and want to get out from under the amount I borrowed on my CC.

I have added new siding to a little over half the house. I ran short on money a few months ago and have not finished about a third left on the new siding. The siding is a little lighter color than the old, just a little different. It is also ran a different direction so not very hidden either. The back and one back side has not been completed.

Working with a Mortgage person now and scores are high enough, job and income are ok. My question is I want to get this done before the first of the year and I am worried about the appraisal if I do not get the siding completed. Should I take my chances and get the appraisal as is? How much could they possibly dock for this, especially if I tell them I am getting it done, just not before the apprasier showed up?

The estimate to finish up is 4k and I just cannot come out of pocket with that till into 2014 and I do not want to borrow because I am concerned the credit rating will drop under 700 tri merge.

What is everyone's opinon here? I desparately want to get this refi'ed as its been the plan, but have waited months adding new bathroom out of pocket already to increase value and really do not want to wait another 6 months to get this done. Just weary of some new mortgage changes I am hearing.

THanks for any help or advice on this from anyone that would know.

Chris

[SmartMoney]

There's no doubt the added square footage helps value, but without photos, it's impossible to issue an opinion on the siding. If it's so noticeable that it is a detraction, it will knock the "quality" of the construction down a notch......or possibly two notches. Other issues at hand, were permits pulled on the addition? Was the work done by qualified contractors?

Are any other projects undone? If an appraiser finds projects in the middle, you'll be hit with a "subject to completion" for the rest of the work.........it's very possible this could happen with the siding, it just depends on what it looks like.

Appraisals are the luck of the draw. Some of the most inexperienced are out there performing these reports......or you may be lucky with someone that knows what they are doing. You could have two different appraisers out there and get two completely different reports.......You need to bite the bullet, apply for the loan and see what you have and go from there. As badly as you wish to predict the outcome, there's no way to issue any certainties. Everyday we see borrowers that have a strong desire for ironclad reassurances before they begin the process and only the foolish will provide such assurances. Anyone that utters "no problem," is your personal hint to run fast, away from that loan officer.

[Elke Mariotti]

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Fully agree!

[thelopez2]

When you said the back and one back had not been completed , do you mean there are open exposed studs or exposed plywood?

Don't focus on telling the appraiser that the job is unfinished. Finished but ugly is better than unfinished. All work should appear to be quality construction.

Also keep in mind you need to have some cash reserves. Don't spend all of your cash.

[chris288]

Thanks to both of you on the reply. This is very helpful and what I am looking for on the best options. I will get some pictures on here in a couple days when I get back into town and you can tell me what you think.

Good thing is that's it not noticeable in color hardly at all, but the new siding is run different direction that is more modern.

The additions are fully completed and have been "re touched" up over the past 2 months. ( Meaning I have repainted all trim, blemishes, scratches etc.) New hardwood flooring and completely new bathroom as well. I tried to do all the little things as I figured its more of a one chance at this.

Interest rates seem to be climbing, lending seems to be getting more difficult and I want to get out of all the money I borrowed for these additions, so its important to try and impress as much as possible the first time. 10k-20k because of it or get a "subject to completion"

If the appraiser will dock it the amount it will cost to finish it before then its a wash. I just want them to dock

I will get some pics by mid week and let me know what you opinion is. Also, I was going to type up all the "updates", additions, new deck, roofing, partial siding completed, square footage added, windows, bathroom added etc on a piece of paper to give to the appraiser when he comes out. Is this a good idea to walk around with them explaining what has been done in the past year? Does or will it matter?

Since the updates and additions are so new, the specs on the house by pulling Willow.com which is not been updated show 986 square foot. We have added exactly 954 square foot of living area finished/ plus bedroom and full bathroom. Willow still shows the old specs.

Thanks again for the help on this.

Chris

[chris288]

Thanks for the reply TheLopez. Not at all as far as studs are not showing. The house did really need new siding, but my contractor is licensed and a friend of mine and I figured while I was at it wanted to completely update my home with all new.

Permits were pulled on everything and it was done by the book. My new tax reassessment shows the increase in my property tax and all and he was a licensed contractor as well.

All work quality has been very good BTW. No shotty quality issues.

Basically, he has finished the parts that show the most on the siding. Complete front, one side, and halfway down the back of the home. He stopped at my chimney so it looks like everything has tied in.

Thanks,

Chris H

[thelopez2]

Originally Posted by chris288

Also, I was going to type up all the "updates", additions, new deck, roofing, partial siding completed, square footage added, windows, bathroom added etc on a piece of paper to give to the appraiser when he comes out. Is this a good idea to walk around with them explaining what has been done in the past year?

Chris

Yes , I'd type it up , date description , amount. Include copies of receipts.

[Annemieke Roell]

As far as the siding is concerned, based on your description it should not make any difference, provided it is not damaged in any way.

As far as the list and expenses goes, the appraiser can see what has been updated. It doesn't matter to us what the house looked like a year ago. We want to know what it looks like today. You do want to point out things that are not easily seen, such as HVAC replacements etc. But the appraiser should ask you questions.

Please do remember that cost does not equate value.

[chris288]

Thank Anne and Lopez. I will type up the list and talk with the Appraiser when I get this done. I have tried to look over everything inside and out along with all the little things.

No damage at all on the older siding. Unfortunately, I agree with the cost vs value aspect. The biggest thing added was livable square footage area so hoping this will be the number 1 thing to add value to the home.

If there is anything else that you look for Anne that I could do please let me know.

I will take the advice here and probably go ahead and go for it in the next week or two. This was the biggest advice I was looking for.

Thanks,

Chris

[willow wind]

When permits are pulled, that data is sent over to the assessor's office. That's good that you pulled permits. That triggers the assessor going over to measure the improvements.

However, what you also need to make sure is that the town or county building inspector ( depending on what state you are in ) also signed off on those permits.

Since you have a totally new addition on the home doubling your square footage, signing off on those permits likely means a cerificate of occupancy. Before you go any further, check with the building department to make sure your project is complete enough for that. Don't worry about the siding in that regard as long as the entire home is tight to the weather with some sort of siding.

You may get an incompetent appraiser who hasn't a clue how the process works and will let it slide. Then again you may get someone who knows what they are doing and is going to be looking for all relevant paper work to be completed and signed.