Wednesday, July 12, 2017

Selling Twice

Homeowners: Your Home Must Be Sold TWICE! You found the perfect home. You know that prices in the area are rising fast. You make an offer and it is accepted by the seller. The title and mortgage process begins. And then - the appraisal. The bank wants a professional opinion of how much the home is worth. That makes good financial sense from their point of view - protecting their investment in case something goes wrong. And, what happens to the transaction if the appraisal is less than expected and less than the offer price. That depends on what percentage the buyer is contributing as a down payment. If the proposed mortgage has a low percentage down payment - say something like 5% - a low appraisal amount could cause the mortgage to be turned down. The bank may consider the risk too high. If the buyer was putting down something like 30%, the home with a lower appraisal might still be approved as the bank looks at their risk ration. For more, have a look at today's article