FAQs Archive - Musketeer Mortgage

Q: The appraisal came in below the sales price. What now?

Either the seller lowers the sales price to the appraised value, or you have to bring the difference between the sales price and the appraised value on top of your down payment because the lender will only lend on the appraised value if it's lower than the sales price. You can also meet in the middle and split the difference with the seller. Your agent will help you negotiate this.

Q: Why do I have to fill out the appraisal request form up front?

Some lenders require this up front; others cover the cost for the appraisal and then get reimbursed at closing. If they ask you for an appraisal order form, it's because they need to order the appraisal as soon as possible and this form allows them to do so the second they get the green light. If an appraisal is paid outside of closing by the buyer, or "POC", it's because appraisers have to be paid up front to do their work whereas lenders and brokers only get paid if the loan closes. Paying up front with a credit card mitigates the risk of the lender being stuck with the bill for the appraisal which is a "third party" fee. Every lender/broker handles this differently. Regardless, this is why many loan officers won't order the appraisal until the inspection is finished, so get that home inspection done ASAP so you don't slow down the appraisal. :)

Q: How much will my appraisal be?

This completely depends on what type of loan it is, what lender you are going through, and where you live. VA loans are usually around $500-$600 but vary by state, FHA loans tend to run between $550-$650, and conventional loans can average anywhere from $545-$650 but can be more depending upon the square footage. We truly never know until we order it.

Q: How long will my appraisal take?

On average they come back in a couple weeks, sometimes faster if we're lucky. During peak volume times like the summer, your appraisal will often take longer. There are places in MN and CO that can take nearly 30 days. These are exceptions, but we never know until we order the appraisal which is why we like to do so as soon as possible. If you live in rural areas, your appraisal can take longer as well. Rural areas typically do not have a strong bank of appraisers to choose from. We are more or less at their mercy, unfortunately.

Q: I have rental properties, can I use the full rent I receive to offset those mortgages?

It depends on how long you've owned them and what shows on your tax returns. If it's a new rental property not reflected on your taxes, lending laws allow you to use 75% of your rental income per property because they are using a 75% occupancy rate and going under the standard assumption you might not have rent income for 25% of the year.