What happens when the appraisal does not match the listing price?

An appraisal that comes in lower than the purchase price could derail the entire home buying process. Mortgage lenders use the appraised value of the home to calculate your loan-to-value ratio (LTV) which measures how much of a home’s value the lender will finance. 

When the appraisal comes in lower, your lender will likely decrease the amount you can borrow. So, here are a few potential options you can do in that situation?

  1. Buyer will pay more out of pocket to meet new LTV & downpayment 
  2. Negotiate with the seller to lower their asking price. 
  3. Cancel the home purchase contract 
  4. Request an appraisal rebuttal (however, rebuttals often have little or no effect)

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