Questions about my lender

4 Replies

Hi everybody!! So I am currently in the process of refinancing my house. When I purchased the property originally the lender I used stretched my numbers to the max. ( meaning I got approved for the most amount of money that I could possibly get). So now I am in the same situation only my numbers have gotten a little tighter. Also I did an addition to the property so I have to get an appraisal done. And my refi is dependent on the results of the appraisal. So my question is basically do lenders get paid only when the loan goes through? Obviously I'm concerned that if the appraisal doesn't come back as high as I projected will I be stuck with a bunch of fees from the lender?

Thanks for the advice

Originally posted by @Sean Rhodes :

Hi everybody!! So I am currently in the process of refinancing my house. When I purchased the property originally the lender I used stretched my numbers to the max. ( meaning I got approved for the most amount of money that I could possibly get). So now I am in the same situation only my numbers have gotten a little tighter. Also I did an addition to the property so I have to get an appraisal done. And my refi is dependent on the results of the appraisal. So my question is basically do lenders get paid only when the loan goes through? Obviously I’m concerned that if the appraisal doesn’t come back as high as I projected will I be stuck with a bunch of fees from the lender?

Thanks for the advice

The lender doesn't get paid if the loans doesn't go through but the only items that they can charge you for are the appraisal and credit report. So, if they ask for additional items to be paid you don't have to pay these amounts. If your addition is permitted by the city and was done in a workman's like manner it will increase the value of your home. What are the numbers on your home? Value, amount owed etc.

@Shaun Weekes initially I paid 295k for the home in 2018. I didn't get a lot of appreciation over the last year. Most of the apps say the value is 310-320k. So I did a bathroom addition making it from a 5/2 to a 5bd/3bth. I've ran the comps myself and it's looking like most 5/3 in this area are near 400k.

Originally posted by @Sean Rhodes :

@Shaun Weekes the amount owed is like 280k

If your comps are looking good, then you should be able to cash out if your income can support the DTI ratios needed to get this approved. The appraisal will tell the tale and I would put together a list of items upgraded and provide all permits to the appraiser so that they have the all the info they need to get this all done.