Can I Get Though the Appraisal Step to Refinance?

The Making Home Affordable Government Refinance Program is aimed at helping American home owners refinance at lower mortgage rates.  If home owners can refinance at lower rates they will have more money in their pockets to spend which in turn will help to stimulate the economy.  The question that must be answered is "will home owners get through the appraisal step of the mortgage application process?" 

So far the answer seems to be an astounding no.  If you do not have a loan-to-value under 90% then it is highly unlikely you are going to get a rate anywhere near 5%.  The problem that many home owners have is that the appraisal value for their home is coming in much lower than they expected.  If the appraisal value is greatly lower than what the home owner believes the home is worth, their loan-to-value ratio will increase, possibly greatly increase.

Unfortunately homes in areas where foreclosures and short sales are happening are decreasing in value each and every day.  Many home owners have not had an appraisal competed in the last few months.  If you are going to complete a mortgage application for a refi, you might want to get a more current appraisal.  A large proportion of home owners are seeing that the appraisal step is killing their chance to get a lower refinance rate.

Many banks and mortgage lenders are not offering low refinance rates to anyone with a loan-to-value ratio over 90%.  If your home has greatly decreased in value recently and you have not owned the home for more than five years, it is highly likely that your loan-to-value ratio could be well over 90%.