@Carkam wrote:Here is our story...For a year and a half my husband and I were looking for a home.In November of 2015 , we looked at a new construction spec home and fell in love with it.Contacted a Mortgagae Company and got approved to sign a purchase agreement.As the home was being built , we added things and did not add to purchase agreement but paid the lumber yard out right for the upgrades. Our new home was to be completed at the end of April and when the realtor was surprised we had not gone through underwriting as of the beginning of April, panic arose.We had put 17,000 in upgrades and now we had the risk of not being approved for the home.Fortunately I had this board to read and I read the entire FHA guideline to get all of my docs prepared.I turned in all of our paperwork on April 18 and we closed yesterday on May 18.We took a huge risk putting those extras in the home.Unfortunately, the home appraised for only the purchase agreement even though we have an additional 17,000 in it.Overall, the experience of building was not bad, Michigan Mutual was very good to work with and our Realtor was with us through the whole process.
Congratulations on your new home! Time to celebrate your achievment!
One quick statement about the appraisal: the appraiser can't take into account what you actually spent for extras without those extra's in the contract. When the appraisal is ordered, part of the process is for the lender to supply the contract to the appraiser, including all addenda. Upgrades rarely, if ever, receive dollar for dollar value. I believe it is part of the reason builders requirement payment for upgrades upfront. 50% payment is not unusual (here), but I have seen some builders require 100% payment of the upgrade especially if it is a small builder.
Anyway, Congratulations on your new home!