Chicago Mortgage Refinance- The Risks Associated with Refinancing

Chicago Mortgage Refinance Lending Guidelines And Requirements

Gustan Cho Associates are mortgage brokers licensed in 48 states

This BLOG On Chicago Mortgage Refinance Was UPDATED On December 9th, 2018

What are the guidelines and requirements for a Chicago mortgage

Many homeowners refinance mortgage loans because they want to reduce their mortgage rates thus lowering their monthly payments.

In this article, we will cover and discuss the benefits of refinancing a home mortgage during these times of historic low-interest rates.

Mortgage Refinance with Lower Rates and Save

There are still millions of homeowners in the United States that have mortgage rates higher than 6% where they can lower their mortgage rates and lower their payments by simply refinancing their current home loans.

  • Chicago mortgage refinance solutions would save them thousands of dollars
  • Homeowners with an FHA Loan can explore doing an FHA Streamline Refinance with no appraisal, income, credit
  • Refinancing can save tens of thousands of dollars during the course of a 30 year fixed rate mortgage loan
  • The Team at Gustan Cho Associates can help homeowners with a Chicago mortgage refinance!

Unfortunately, there are a substantial of homeowners that run into problems during the refinancing process and ultimately their refinancing process comes to a halt.

Chicago Mortgage Refinance Risks

What could be the risk of refinancing a Chicago mortgage?

One of the major hurdles that stop a refinancing mortgage loan from closing is when the home appraisal comes in lower than anticipated.

  • Recently, I had a Florida Mortgage Refinance Loan that could not go through
  • This was because the home appraisal came in substantially lower than anticipated
  • The homeowner did research comps and went to websites like Zillow and Redfin

Comparable came in around the $800,000 mark:

  • But the home appraisal came in at $650,000
  • Low home appraisals are one of the risks associated with refinancing

My client submitted all the proper paperwork:

  • Her completed signed mortgage application was approved by our underwriting department and we had a clear to close

Unfortunately, her appraisal came in at $650,000:

  • This value was well below everyone’s expectations including the lender
  • The low appraisal halted the refinancing process 

The homeowner needed a minimum of a 75% loan to value on her Florida home in order to proceed with the refinancing:

  • The $600,000 appraisal was pretty much worthless for her refinancing needs

Home Appraisal For Refinance Mortgage

A home appraisal is not a science.

  • It is the accumulation and interpretation of that raw data by the appraiser to produce a value of the subject property
  • If you had three appraisers value a particular home, the chances are that you will get three different values

Due to the real estate and credit market crash of 2008, new regulations were implemented in the mortgage industry that included the appraisal process.

Low Home Appraisal Can Be Issue

Why a low home rating can be a problem

The bottom line is that if you are refinancing your home, you need to be prepared for a low-value appraisal.

  • There are solutions on contesting a low appraisal

Homeowners can order another appraisal:

  • Or can contest the appraisal
  • If you can get comparable of similar homes that sold in the nearby area, chances of getting appraisal contested are great
  • If you can find a home down the street from you that sold to the estimated value of your home, your appraisal will probably definitely be reversed to your favor


This mortgage blog post article has been updated on December 9th, 2018

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