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How much of a factor is assessed tax value vs a higher market price in getting a mortgage? Have many been denied or lost a sale not only because the didn't qualify but the bank said they're over paying based on assessed tax value.
How much of a factor is assessed tax value vs a higher market price in getting a mortgage? Have many been denied or lost a sale not only because the didn't qualify but the bank said they're over paying based on assessed tax value. T
The appraisal reports will include it, but the gaps can vary from being half, to being double..assessed vs. contract. Down payment and credit score have more to do with it, than any are willing to admit, even though it is suppose to be completely independent...why kid yourselves?
How much of a factor is assessed tax value vs a higher market price in getting a mortgage? Have many been denied or lost a sale not only because the didn't qualify but the bank said they're over paying based on assessed tax value.
Assessed value can be and often is much lower than market value of a house. I wouldn't think that a bank would be concerned about assessed value, only the market value as determined by an appraisal.
The bank will write the mortgage based on the purchase (market) price, but will consider the assessed value (and more important, the 'appraised' value) as another data point in the mortgage approval process. That's why many mortgages are written for less than the full purchase price and require 15-30-percent down (depending on the credit rating of the buyer). Assessed value often does not consider the land/lot.
Ironically, people hope for a lower 'assessed value at tax time, a lower appraised value when buying and a higher 'appraised' value when selling. "Assessed value" generally has very little, if any, influence on the mortgage approval process.
How much of a factor is assessed tax value vs a higher market price in getting a mortgage? Have many been denied or lost a sale not only because the didn't qualify but the bank said they're over paying based on assessed tax value.
The tax assessed value is a ZERO percent factor with regard to a mortgage.
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Originally Posted by TimtheGuy
The tax assessed value is a ZERO percent factor with regard to a mortgage.
Agreed, it's the appraised value that matters. The assessed value is how the city/county assesses property taxes, the two measures almost never match each other. In states where it is allowed, homestead exemptions reduce the assessment to minimize the tax burden on the owner if they use that home as their primary residence.
The tax assessed value is a ZERO percent factor with regard to a mortgage.
Obviously depends on the state, but I feel like if it's not, it should be. But I think the only scenario where it should be is if the assessed value is well below the market value and it should be reasonably expected that it will increase significantly within a few years. Because depending on how much room the buyer has to qualify, a big jump in the tax bill could make the mortgage unaffordable.
The bank wants to know they can sell the house withoug losing money if you default. So the most important thing is the APPRAISED value. As determined very recently by the appraisal they ordered. I would be surprised if they care about the tax assessed value.
Tax value has zero influence on loans, other than if the high value and tax rate screw up your debt to income ratio.
Appraised value is what matters.
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