What does home need to appraise for?

[fuzzybear22]

My realtor says it needs to appraise for the loan amount (after downpayment) and mortgage officer says loan amount as well. Another realtor said purchase amount and so do lots of others from what I've read online. I guess the mortgage officer will give the definitive answer but I just wanted others' opinions. I'm buying a house for 150000 and if it appraises for 144750 (the amount after 3.5% down) wouldn't the loan be 100% LTV instead of 96.5% per FHA assuming value=appraisal.

Would I have to come out of pocked for the 5250 plus another 3.5% on the 144750?

[BaileyMae]

It has to appraise for the purchase price. My accepted offer was $137,500. My appraisal had come in at $137,500 or higher. I went FHA as well. 

If it appraised for lower, the sellers would have to come down on the price or I would have had to come up with the difference between $137,500 and what it appraised for.

Hope that helps. 

[StartingOver10]

It has to appraise for contract price or more.

The LTV (loan to value) is calculated on the contract price OR the appraised value whichever is lower.  If the property only appraises for the loan amount, then either you will have to bring in more money, or the seller will have to drop the contract price to the new, lower appraised value, or the deal is dead.

Sounds like the LO and the agent are new.

[fuzzybear22]

Thanks for the help. The LO's been in his field for nine years and the realtor three. I am shocked lol. Fortunately one of the documents that must be signed by me and the sellers basically states the same information that was in the contract in regards to appraisal price and refunding of earnest money should it come in lower than 150k. I still don't think the LO or the realtor know what I was even talking about sadly.

[StartingOver10]

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@fuzzybear22 wrote:

Thanks for the help. The LO's been in his field for nine years and the realtor three. I am shocked lol. Fortunately one of the documents that must be signed by me and the sellers basically states the same information that was in the contract in regards to appraisal price and refunding of earnest money should it come in lower than 150k. I still don't think the LO or the realtor know what I was even talking about sadly.

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Wow...sounds like a huge miscommunication or misunderstanding  somewhere Can't imagine a LO not understanding LTV

[DallasLoanGuy]

purchase price or more.....