Underwriter Adjustment to Appraisal

[Donn Neufeld]

Hi All,

I'm Hoping for some clarity and understanding with my current refinance process.

The underwriter at the mortgage company I am currently working with for a refinance has requested that the appraiser reduce GLA (Gross Living Area) by approximately 37% because 37% of square footage is a "guest house". This seems a little beyond the normal scope to me. I'm working with the same company that did our purchase 11 months ago, and this was not an issue.  The underwiter just made a $17,000 or 5% downward adjustment against the licensed appraiser's report. 

What are my options with communicating with the underwriter?

Did I just learn a $400 lesson not to pay out of pocket for an appraisal during a refi?

Here's the language used in the adjusted appraisal report:

"Per under writer request the additional back house area was extracted from the total GLA of the subject property." 

Here are the details: We purchased the property as our primary residence Oct 2015. It was marketed and purchased as a 3 bedroom 2 bath (which is also reflected in county and city records). The house is divided into a 2 bedroom 1 bath main house (our primary) and a 1 bedroom 1 bath behind or guesthouse. The units share a wall, heat/ac source, and address. 

Purchased $350K, Initial Appraisal $377K, Underwriter Adjusted Appraisal $360K