As discussed in pre­vious articles, the ap­praised value of a home is dependent on a va­riety of factors. Often, a homeowner will not “agree” with the value at which his home was appraised. As much as homeowners would like appraisals to be based on the amount they know they can get in the current mar­ket, it’s not as simple as that. It is especially important to keep this in mind when buying a house in a “hot” area in town, as the rea­son why so many people will pay a lot for a particular house is usually due to it being in close proximity to a certain shul or because of a certain crowd that is living in the area. As desirable as that may make it for the buy­ers, it is still not sufficient proof of collateral for the bank, as it looks at comparable sales in the general area, which gives a more solid estimate of the home’s value.

Many times we come across situations where the appraisal comes in much lower than the purchase price. When this happens, the borrower has to come up with a substantial amount of additional funds, and on top of that has to show proof of those funds (which might be a challenge, especially at that point in time). Lenders sometimes ask for a letter of explana­tion from the borrower stating why they want to purchase this house despite the fact that the appraised value is much lower than the pur­chase price.

It pays to ask your mortgage broker or re­altor about the appraised value of the houses you look at, as they usually know which nearby comparable properties recently closed. This is especially important if your funds for the down payment are limited, as this can sometimes “make it or break it.”

Eli Garfinkel of Funding Resources Mortgage Compa­ny is an experienced and reputable loan officer. With a list of extremely satisfied clients, Eli specializes in great customer service and dealing with complex cases. Eli is available to answer any mortgage questions, with­out any obligation.Eli can be reached by phone or text at 732.278.6526 or via email egarfinkel@fundingrmc. com or in the office at 732.364.7373 ext 22.

By Eli Garfinkel