HELOC Loan appraisal issue

[Swarochisa Kandregula]

My wife and I applied for a 200k heloc loan at a local credit union. Our house(new townhome 2021) on redfin was valued at 1.08M when I applied and the outstanding mortgage was about 682k. With this valuation I was sure that 200k would be less than 90LTV. The underwriter got back to us saying they couldn't approve us for 200k and instead countered with 142k . I called up the loan officer and she told me that the appraisal came back at 912k ( or 920k , I couldn't hear it clearly). I knew the appraisal would come back lower than what I saw on redfin but I didn't think it would be this low. She told me that I could pay for a full appraisal or a desktop appraisal but that doesn't guarantee an increase in the appraisal.

While I was discussing this with my wife , I looked up our neighbors house ( built at same time) which was listed for sale about a month ago. It was sold on 9/20/23 for 970k. This house has the same layout and sqft as ours. I emailed the loan officer about this but I would like to know my chances of getting the 200k loan with this new information( I may not get 200k but anything closer to that number would be great). Should I go for another appraisal? Desktop or the full one?