Thursday, 07 July 2022
By Leahs Mortgages
Shawn Stillman quoted in The Globe and Mail: ‘Mortgage Rundown: A sinking real estate market requires fast appraisals’
“Get the appraisal done the day after you buy a home,” says Shawn Stillman, Mortgage Broker and co-founder of Mortgage Outlet. Ordering an appraisal as soon as possible eliminates the mortgage risk of prices deprecating before closing.
By the way, this is also imperative if you’re refinancing and want the maximum 80 per cent loan-to-value. If you need a $400,000 mortgage on a $500,000 property, for example, and a few panic sales in your neighbourhood push down its value 2 per cent before the appraisal, that lowers the maximum refinance amount to $392,000.
Remember, appraisers base their value estimates on sales of comparable properties. “With so many listings not selling, you just need one neighbour who’s getting divorced to drag down your comparables,” Mr. Stillman notes.
A parting tip: If you have a far-off closing and you’re using a more obscure lender (e.g., a small non-prime lender), be safe. Verify in advance that they won’t reappraise the property or ask for more equity if home values dive before your mortgage closes.
