An Appraisal Can Change Your Interest Rate

I have talked about this before and how the interest rate isn’t the most important part of the mortgage and how important the appraisal is.   This is especially true in a housing market like Fort Lauderdale and the rest of South Florida due to having so many foreclosures and short sales. 

Jack Guttentag who writes a lot of real estate related articles agrees with me in his latest article “Appraisal Can Trip Up The Mortgage Quote.”  I highly recommend reading this article.

“Changes in property value may affect the price by shifting the ratio of loan amount to property value (called the “LTV”) into a higher or lower band. These bands are 65.01 to 70, 70.01 to 75, 75.01 to 80, 80.01 to 85, 85.01 to 90, and 90.01 to 95. Borrowers who take a loan amount that places them at the top of an LTV band are highly vulnerable to a price increase resulting from even a small reduction in value.”