Appraisal came back very low!

[Gilbert Lugo]

Hi, I'm currently in the middle of my second attempt at refinancing out of my FHA but seems as if it has gone south with a low appraisal. I've been trying to free up my FHA in order to be able to use it on a larger property in the near future. A few weeks ago I tried to refi with a recommended lender but it did not work out since the lender would only lend on 75% LTV and I needed the property to appraise at $210k but it came in at $200 which meant I would have to come out of pocket $7k and a 4.8 interest rate compared to my 3.9 in order to convert to a conventional. This did not work for me.

My current lender reached out and said they could beat the previous offer with an 80% LTV and a 4.25 rate if the property appraised at or above $200k it would cover all closing costs and nothing out of my pocket.

I was not too worried since a few weeks ago (6/17/19) it appraised at $200k. Today when I got the appraisal report it came back at $176,000. Talk about off! 

Please help! Is there anything that I can do to challenge this appraisal? 

Thank you in advance for your help and support

[Matthew Dennehy]

You can let the lender know about the problem you have with the appraisal and they should be able to get another appraisal. If you have the contact information for the appraiser, you can even contact them directly and ask why it’s so much lower than the previous appraisal. Perhaps even sharing the other appraisal with them.

Appraisals can be funny sometimes. Almost like a shot in the dark, you never know where it will land.