19 Apr 2012

Mortgage appraisals coming in lower than purchase price

Buying a house can be a stressful process, but a new trend is making it even more difficult in some cases, reports the Financial Post.

Hot real estate markets like Toronto are seeing very high prices being paid for homes – but this doesn't mean that the buyer and the bank see eye to eye. Mortgage companies are frequently giving appraisals that come up short of what the buyer agreed to pay, resulting in issues with financing.

For example, a buyer may pay $450,000 for a house, only for the mortgage company to do an appraisal that puts the value at $400,000. Essentially, if the bank decides that the buyer overpaid, they'll be forced to find another way to make up the difference.

One way for buyers to protect themselves against this issue is to ensure they get the highest price possible for their current house. De-cluttering the home by putting some items in self storage before an open house can help raise the bidding and ensure that the seller walks away with more money. When the seller goes to buy their new house, they'll have the extra cash to cover an appraisal shortfall.

Self storage can be a smart way to hang on to valuable items without taking up room in a house or apartment. For Toronto storage solutions, there's no better than Jiffy Self Storage. Those interested in self storage should check out the affordable rates on Jiffy's website, where they can also enter to win a free iPad 3.

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