Second Mortgage

Why would a mortgage appraiser reject to give you a second mortgage?

There are a few important questions that need to be answered to understand the role of mortgage appraiser in lending you a second mortgage.

The questions are does a mortgage appraiser have the right to reject a mortgage? Who has the right to reject a mortgage? What might be the most common reasons to reject a mortgage in addition to the condition of house? 

As the financing is waved and the sale is “as is, where is”, if there is no sufficient reason to proof deterioration, con we consider that the purchaser forfeited his deposit to the seller?

It is important to understand that the appraiser has no dog in the hunt regarding approval or declination of loans. His sole role is to verify the security’s value against the contract price using like kind sales in the area.

If the appraisal fails to agree with the contract price, typically the buyer can either proceed anyway with the purchase and pay the difference, renegotiate the price to the appraisal price or failing either of the above kill the deal.

It is unusual for a buyer who wants a home to simply kill the deal. Probably they decided it was not the home they wanted or located another after this one and this was a way to get out w/o penalty.

You need a lender turn down letter to kill the deal over financing, unless the sale agreement had a poison pill regarding specifically the appraisal value equaling or exceeding the contract value.

That would then be grounds to kill the deal over the appraisal. Again, it is unusual to not negotiate further under that circumstance. If there is no financing contingency, then your buyer cannot terminate the contract just because the house did not appraise high enough.