The myth of appraisals impacting property tax

Mortgage broker:

ProMortgage.

Property type:

Appraised value: Loan amount: Loan type: Rate: APR: Backstory:

Liz Bayer,

Single-family home in Hayes Valley.

$3.4 million.

$1.725 million. 30-year fixed.

3%.

3.015%.

Past clients of mine had done an amazing renovation on their Victorian home.

This was quite a transformation from when I helped them obtain a mortgage to buy their home back in 2010.

Their goal was to tap into some of the equity in their home to recoup $500,000 from expenses on their remodel, and reinvest these funds through their financial planner.

When they bought their home, the appraised value was $2 million, and my clients knew that the current market value would be much higher. They were worried that the appraisal would trigger a reassessment of their home value with the county (triggering a property tax spike), which is a concern that I frequently hear from many of the borrowers that I work with.

I assured them that the appraisal is solely used for the loan transaction and it is not sent in to the county for property value reassessment. In 11 years' time, their home value was up 70% from when they purchased it.

We did run into a credit score hurdle, because when COVID-19 hit, my borrower was working from home. Like many people I know, this allowed him and his family to work remotely, so they opted to work from their beach home. However, that home had spotty mail delivery, which resulted in a missed payment on their mortgage.

This caused my client's score to drop below 700.

While most Jumbo lenders require a score higher than 720, ProMortgage was able to broker the loan to a lender who has a more common sense approach to underwriting, with still great rates.

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