Quote:
Originally Posted by sa226
Looking for some additional opinions and viewpoints.
I'm in a situation where the lender appraised value of a property i'm interested in came in about 5% less than the accepted offer price. So all else being equal I would need to come up with that extra cash to make up the difference in what the bank is willing to finance.
Are these situations common? If I were to come up with the extra cash, isn't that "fake equity?" Its not even contributing to the principle.
This purchase is more value\short term oriented than it is emotionally. Stuff like this is lowering my comfort level.
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This happened to me on my house, we put up the extra money. It does contribute to the principal, since your mortgage will be lower than it would have been otherwise. I would take it as an opportunity to re-evaluate. When it happened to me I was confident the house was worth what I paid, and that the appraiser was wrong.
Also, you may have the option of getting another appraisal done, or going with a different bank who would want their own appraisal. If your banker/mortgage person pushes back on another appraisal, tell them you're not doing the deal with them otherwise. Then follow through and get different financing if they don't bend. Of course, the new appraisal could come in the same or lower, depends how confident you are in your valuation.