My fish room just Cost me $7000!

[brewmaster15]

Hi all,

Well I had some disappointing news . We decided to refinance our house with the low mortgage rates and combine our "debt" into a big single monthly payment. so we went thru all the paperwork and did what we needed to do... shelled out $300 to the mortgage people for an appraisal. The property values in our area have risen alot so we were thought that our houses value might be high enough to allow us to refinance and stay below a magical cutoff value of 80%. If you borrow less than 80% the value of your home you don't need to pay private mortgage insurance. I know what houses on my street sold for and figured we were golden.

Well the appraisal came back and I missed my mark by $5000. I couldn't believe it. when your house is appraised in the USA, they go by Comparable properties that recently sold in your area. My house has more land than these and is of similar size, BUT they all had more living space... they had finished basements. :-\

In my zealous acquisition of fish and blind determination to build a fishroom... my basement was not quite finished any more... I tore out the drop ceiling for PVC piped air, and Tore out the finished sheetrock wall to make room for another rack, and procrastinated on finishing the sheetrock on some new walls., partly out of fear of the dust in the tanks . I also removed the panneling on one wall because of humidity concerns.

By not having this room "finished" anymore. My houses appraisal came in $7000 less than it should have. :-\ :'( :'( Talk about putting a damper on your financial planning.

So those of you planning on converting a room to a fish room , keep this in mind if you are thinking of selling or refinancing. maybe someone will benefit from my $7000 screw up.

-al

[richgrenfell]

Well, that usre must have felt like a punch in the stomach! sorry to hear it. right about now my wife would be saying "you just HAD to have those damned fish now didn't you"!

Rich

[Carol_Roberts]

Sorry Al, what a bummer.

The refinance on my house just closed - 4.37% for 15 years. We may never see interest rates like that again.

I made sure to be home when the appraiser came so I could explain what those barrels and hoses were doing in the master bathroom garden tub, lol.

I had my RO stashed in a closet along with all the buckets and fish paraphernalia. Luckily my stuff can all come right out, so there was no problem.

Can you throw up some panelling and have him revise his estimate?

[fcdiscus]

Ah, I bet you would do the same thing again. Frank ;)

[Discus_KC]

Al,

I thought you had wonderful news ! LOL !! Like you were buying the mother load !!!!!!!!

My basement isn't finished. I bought it that way on purpose so I could spill water on the floor and not worry !!

We just refinanced and the appraiser was in awe at the basement. He couldn't believe I had so many tanks. I bet his comment as he left was "Aren't fish tanks supposed to have water and fish in them" ???

Sorry man, you can't win !!!!!!! LOL

Jack

[Barb Newell]

Hi Al, sorry to hear that.

Carol, I love your bathroom!!!!!!
I want all my bathrooms in my house to look like that. My son and daughter wouldn't be impressed!

Barb :)

[Paulio]

Al,

Ask the appraiser about tenative value. The value on our last house came up short because of an unfinished remodel on a bathroom and the basement was unfinished due to ripping it all out after a flood. They were able to adjust the LTV and cash out the extra money based one the idea of finishing the work. I dont know if it will work for you as mortgage regulations can vary by state but it is worth looking into.

Paul

[brewmaster15]

Hi paul,
Thanks, I'll look into that.

Hi Carol,

My fishroom is so crammed with tanks and hanging wires that until I finish the racks and wiring... I wouldn't even be able to get a piece of panneling in the room!LOl

-al

[DiscusBob]

Al-

I'm sorry to hear about your low appraisal.

I spent close to that much on a two week vacation once. Tangibly, all I have to show for it are some souveniers and pictures....but I had the time of my life. I wouldn't trade it for anything.

I'm curious: Has having that fish room and raising those Discus given you at least $7000 worth of enjoyment?

;)

Bob

Dang that sucks >:(

We have also just refinaced the mortage. Because we stayed with the same lender we did not need a new houses appraisal done in the house direct. They just took the calculated #'s. which worked out for us.

Ronald

[gump]

Bummer Al!!
Pulling the equity you built up in your house now with low mortgage rates is a great idea. Too bad your appraiser wasn't "on line". Valueing the worth of your home is based on several criteria & in your case, the value of the "neighbours" houses should play an important part. Definetly let the appraiser know that you plan some extensive renovations & have it costed out for them based upon "esthetic renovation" & not fish room renovations. Good luck bud.
Pierre

[wildthing]

but doesn't that mean lower property taxes & insurance, even if only a little bit?.........there has to be a roundabout for that swing doesn't there?

[gump]

Usually tax assesments & assesments that an appraiser does is different. An appraisers value is based on several criteria and the banks want to make sure that the value of the house they are lending money for is worth the $ they are lending out. Around here, the tax assesed value of my house is way lower then the appraised value when we remortgage last year. I'm not sure how often the municipality physically drives around & does assesments. that being said, it may be worth while to appeal your tax assesmnet & save a few bucks...you never know, with back taxes owed you may get $5,000 LOL Yea right
Pierre

[SLY]

darn this is a very expensive hobby Al. ;D

[April]

heh look at the bright side Brew...you have a fishroom andyou have a few nice fishies floatin about in those tanks.
what more can one ask for? lol.
its only money..just pretend you never had it. works for me..

[brewmaster15]

Hi April,
The real bummer is Now I have to pay Mortgage insurance, and thats going to cost me another $100 a month. And you all know what I would rather spend $100.00 each month on! :-\

-al

[April]

ok poor brew....well you could move...sell the place.of course now its assessed at lower money...buy a cheaper place..further into the boondocks.
then you could look forward to carrying a few tanks on your back. now thatd be fun movning your fishroom... ::)

[Jeff]

Dang sorry Al.

[henryD]

Ok. I know when they do appraisals and such. When they do a calculation of Living SPace. Basement are not ever included in it. For reference check out a real estate book or a do a search for real estate online. You will noticed that there is usually a seperate item for "other room". Basements and even furnished ones fall under this catagory. Now I am not saying finish basement don't add to the value of your home. You just can not compare LV to LV+ basement. So when they list living space basements are not included.

Now having said this. I think you can contest the evaluation. When the lady came in a did an appraisal in my house. I asked all sort of questions. There is 3 ways they evaluated homes. I can't remember them all but the 1st is they compare it to home sale recently in the area. Second I believe is they do an evaluation based upon the income of the area. I can't remember the 3rd. I think you should ask the bank how they evaluated your home. Maybe 1 method would more than others...

One other thing you can do. Is to take out a home equity loan. or what they call an 80/20 loan. The first loan is 80% of the home.(enough to get below paying PMI) and the second is 20% or less. This would mean you would have 2 loan payments but the total mortgage I think would not be over the 1 large loan. I have not sat down and done the math but I believe it would help you save the PMI each month. Now most banks or lender don't tell you that this is an option. This is because they want to make more money by collecting the PMI.

I would do it soon if you are going to something. I think rates are going to raise.

Call me if you have any questions....I have been helping my parents do this since I was 10 years old. I guess it is an add benefit to having parents who don't speak english very well.

PS last thing is my best friend just got a job as a investment banker for sovereign bank. so if you have any questions or need any help around things I can get you the inside scoop.


Henry

[brewmaster15]

Thanks Henry,
I am already locked in on rate that was better than I had. The problem with the Home equity one....Is I already have one :-\ and I am trying to merge the two, and pay off some plastic...to simplify my life a little.

If you look at the appraisal. they show the comps and each comp has a finished basement... mine does not and they deduct $7,000 for that .Of course they gave me more in other areas but the basement is what made the difference.

Unfortunately I don't have the time to contest this I have a very specific time table I need to work within. I can't do anything I am planning until I refinance and consolidate debt. With that in mind I am going to refinance, pay the PMI. Finish the room and have the house appraised again. By law they have to drop the PMI if you have the house appraised and the loan falls under the 80%. My banker says this PMI will cost me about $106 month. With any luck I can finish this basement... which will also have another bathroom, and then get rid of the PMI.

-al

[Jason]

I've got the reverse problem, I'm home shopping and looking for a place with nothing done in the basement :P

[henryD]

Jason....

LOL...

My wife and I have been considering moving. Right now we both have about 1 1/2 hour commute each way. We have talked about looking for a new place. I told her that I would need a basement unfurnished and we would bring a water test kit along.

Can you imagine telling the real estate agent that you love the home but the water is not good? So we are refusing the place based upon the water quality? I can see my wife's eyes now... ::) ::) ::)

[Carol_Roberts]

Sound perfectly reasonable to me Henry ;)
I think you can call the water company to find out hardness and pH. Try to find a place with a good well. Free water and no one dumping in chemcals!

[Pat_in_NC]

Hey Al,

There is usually a lot of variation in appraisal's depending on who is doing them. They can come up with a wide degree of variation just depending on the specific houses they choose to do the "comps" (comparable homes that have sold recently) with. If they choose to include houses that sold for the higher end of the market for the comps they will get a higher value (even after correcting for differences in finished square footage and detailing ect.). In my experience with this it all seems to be quite an imprecise science and the estimation process that depends almost entirely on the homes they choose to do the comps with. Get a different set of 3 comps--you may get a very different appraisal.

We recieved two appraissals on our house that were only 8 months apart but differed by by more than 20% (our mortgage broker mentioned that the second appraiser tended to have slightly higher appraisals). Ultimately a higher appraised value is only an increase in paper value (not something I put much faith in) but for getting over the 20% hurdle it can really reduce the cost of financing. I would ask around and get another appraisal--three months of not paying mortgage insurance would pay for the extra appraisal.

Pat

[henryD]

See comments like that don't help Carol. When I have fish related issue to discus with my wife I mentioned that there are plenty of people who feel the way I do. Or see things the way I do. She would ask me to give examples. So of course I would rattle off a bunch of simply people. She would look at me a say " Asking crazy fish people for advice is like asking the asylum for their view of the world."

So I could tell my wife that Carol said it is a prefectly good reason and she will only give me that look again..... ::) ::)

[brewmaster15]

Asking crazy fish people for advice is like asking the asylum for their view of the world."
lol...

-al

[lkleung007]

Hey al,

Sorry to hear but if the appraiser adds up the total value of all the Discus you have in your fishroom you would easily be ahead by more than $7000!!!

But seriously, I hope it works out in the end for you.

Regards, Lester

[LobsterMobster]

I know what would make you feel better... more fish. ;D

[barron]

Hi Al

Sorry. About the Robber Barons. P.M.I. or as tell call it between one another, (poor mans insurance). Some will hook you and will make it hard for you to shake it. I know of people that have 30% and more equity and they refuse to drop it. They use all kinds of tricks. They use the legal cost it will cost you to fight againist you.

Check out this company they can work some good deals.
I think you can get it here. Without the P.M.I.

http://ditech.com/index.jsp

also compare here.

http://rate.mortgages-on-line.net/?source=overture

Barron :)