Would you challenge an appraisal for a HELOC?

[Jon McCarron]

Hi all,

I am in the middle of getting a HELOC for a house hack I am currently doing. My girlfriend and I have owned the house for 2+ years, did rehab, and have seen our surrounding market appreciate quite nicely.

We applied with a bank that only did a 75% LTV for a HELOC. They did a driveby appraisal which resulted in a good value, but the 75% ltv was too low for what we are looking for.

We opted to try a different bank that did higher LTV. The bank we chose did a drive by appraisal, and came in at a lower value. The bank asked if we wanted to do a walk through appraisal. We said yes (caveat was that if lower, then the bank had to use that number).

The walk through came in $2k lower than the drive by (which is totally fine), but the report used pretty bad comps in my opinion (I'm a realtor in the area). Sales over 6 months old, different neighborhoods were used, when closer proximity sales have happened more recently.

Question is : would you challenge the appraisal? Can you challenge for a HELOC? Does it make sense to do so , or should I be lucky to get a HELOC at all in this COVID world?

I am leaning toward taking the offer the bank gives (don't want to delay having the access to that cash) , but just wanted to see what the BP crowd thinks. Thanks!

[Mikael Winkler]

Hey @Jon McCarron! I would say if the amount they're offering will suffice for what your goals are, go ahead and take it. But, if not, I would challenge it. However, being sure to do it in a polite way. Not guns blazing haha. I would maybe present the comps you feel should've been used and approach it like "hey, I see these may have not been included in the appraisal report. Are you able to take a look at these?"

There was a recent BP podcast episode (of course I can't remember the number), in which, the guest was an appraiser and they discussed how to gently challenge an appraisal. I know appraisals can certainly be a tricky thing.

Good luck!