4:49 PM 10/12/2011
When we started the refinance process, the bank came up with a market value for our home which was way less than what we paid for it 5 years ago. No surprise there of course. So we got an interest rate locked in, and they sent an appraiser over. The appraisal came in way higher than we expected (around 40% higher than their original estimate).
Our interest rate, while way better than our original rate, is not as low as it could be; the bank said this was mostly because our market value had dropped so much. But now that we've come to find our market value has actually increased over the purchase price, shouldn't we be able to command a lower APR?
I don't want to look a gift horse in the mouth but if we can get a lower rate I want it. But we're locked in now, so it seems there is no recourse ... or is there?
I've never heard of a rate dependent upon value. In any case, you locked it in. Maybe you can pay $$$ to renegotiate it. It might be worth it but rates have risen over the past 2-3 weeks.
5:22 PM 10/12/2011 | -1 Votes
Rates do dependent somehow upon LTV (loan to value) so you could get better rates.
Two options (both with downsides):
- start the process all over again (with the same or a defferent broker/bank). You will loose the appraisal fee, but could save more in the long run. The downside is that you could possibly get a much lower appraisal the second time around...
- wait for the current lock to expire and get new rates based to the new LTV.The down side is that rates might have risen enough to overcome the rate difference.
8:06 PM 10/12/2011 | 0 Votes
If you have higher equity in the home, per the higher appraisal, you should be able to get a better rate. What's the penalty for cancelling the lock? As its a refi you could wait for lock to expire and look at rates again later, i don't see major movement in the market coming up, its been steady and in the neighborhood for a long time.
10:09 AM 10/13/2011 | 0 Votes
Well, that's good! Unfortunately, I don't know the answer. Do you know is it possible these days to get money for remodeling if you refinance -- and when it appraises low or you have little equity?
12:15 AM 10/14/2011 | 0 Votes