Posted on: 11th May, 2009 10:49 am
I am refinancing my home, with an approx 180K loan balance and a conservative property value of $800K. I have an 800 credit score and 7 years of excellent pay history on this loan. Do I have to get (and pay for) and appraisal to refi my loan? With the LTV so low, it does not seem warranted to me.
hello,
welcome to the forum.
it's good to know that you have an excellent payment history and an 800 credit score - that's exactly why you would qualify for a conventional loan. however, you can't skip the appraisal process as it's a standard lending requirement and irrespective of what the property value is or your loan to value ratio is, your refinance transaction would warrant an appraisal report.
in technical lending terms, an appraisal is a valuation tool used by mortgage lenders to verify a property's worth for prospective financing. the mortgage industry relies upon a qualified independent real estate appraiser to guide them in their financing decisions which can't be replaced by an estimated or a trend of the value set by looking or gauging the property's condition, size or any other attributes.
can you skip the appraisal process? yes, minutely possible - there are a few lenders who are still ready to waive your property appraisal provided, you qualify for it. however, the list of these lenders are minuscule. the offered program is known as "piw" (property inspection waiver)
who pays for it - you. it's your property appraisal and the cost has to be incurred by you. there were a lot of lenders in the past who would be ready to pay for your appraisal but that was comparatively a different market then. now - it's very unlikely to find a lender who would pay for your appraisal report.
when you pay for your appraisal, you are definitely entitled to get a copy of your report. you have the right to recieve it.
welcome to the forum.
it's good to know that you have an excellent payment history and an 800 credit score - that's exactly why you would qualify for a conventional loan. however, you can't skip the appraisal process as it's a standard lending requirement and irrespective of what the property value is or your loan to value ratio is, your refinance transaction would warrant an appraisal report.
in technical lending terms, an appraisal is a valuation tool used by mortgage lenders to verify a property's worth for prospective financing. the mortgage industry relies upon a qualified independent real estate appraiser to guide them in their financing decisions which can't be replaced by an estimated or a trend of the value set by looking or gauging the property's condition, size or any other attributes.
can you skip the appraisal process? yes, minutely possible - there are a few lenders who are still ready to waive your property appraisal provided, you qualify for it. however, the list of these lenders are minuscule. the offered program is known as "piw" (property inspection waiver)
who pays for it - you. it's your property appraisal and the cost has to be incurred by you. there were a lot of lenders in the past who would be ready to pay for your appraisal but that was comparatively a different market then. now - it's very unlikely to find a lender who would pay for your appraisal report.
when you pay for your appraisal, you are definitely entitled to get a copy of your report. you have the right to recieve it.
the PIW that shayne mentions will come as a result of automated underwriting, if at all. loans are input into desktop underwriter, typically, and if the model sees that your value is substantially more than the loan request, based on the criteria used, then you'll be allowed the piw. there is a charge for that - $75 last time i looked. if there's any discrepancy between the models used to underwrite and the claimed value of the home, you may end up being required to have an appraisal done.
George, I must share this with you - That PIW is a horror to me. The last time, when I got a PIW on one of the file I was working on, I was happy about it, I told my client that he doesn't needs to be paying for an appraisal but a nominal fees of some $60s to waive the appraisal, he was happy about it too.
The file was at a CTC stage and guess what? I get a call from the processor, she tells me that the PIW is GONE! We now need an appraisal, I was bamboozled to learn this and ran around helter skelter to find out what exactly went wrong until I realized that the processor goofed up with the property value, she changed the number there and the automated underwriting system wouldn't give a PIW anymore! Finally had to call my borrower and explain the situation, he understood and then we did an appraisal to apparently close.
*Such a waste*
The file was at a CTC stage and guess what? I get a call from the processor, she tells me that the PIW is GONE! We now need an appraisal, I was bamboozled to learn this and ran around helter skelter to find out what exactly went wrong until I realized that the processor goofed up with the property value, she changed the number there and the automated underwriting system wouldn't give a PIW anymore! Finally had to call my borrower and explain the situation, he understood and then we did an appraisal to apparently close.
*Such a waste*
wow...that is a waste of time, energy, etc.
i got one last fall on a 90% ltv loan (my son was the borrower!) so we saved him about $300 out of pocket. in the last couple of years, i only had one other piw. that was a wonderful deal, because it was a bank-owned property, in less than good shape, and 90% ltv as well. not only that, but it was a deal stolen from another lender who couldn't get past the house's condition. piw saved the day for the borrower and gave me a loan that i wouldn't have had otherwise.
there's no doubt they are far more rare these days, though.
i got one last fall on a 90% ltv loan (my son was the borrower!) so we saved him about $300 out of pocket. in the last couple of years, i only had one other piw. that was a wonderful deal, because it was a bank-owned property, in less than good shape, and 90% ltv as well. not only that, but it was a deal stolen from another lender who couldn't get past the house's condition. piw saved the day for the borrower and gave me a loan that i wouldn't have had otherwise.
there's no doubt they are far more rare these days, though.
Ask your current lender if they can warrant no decrease in value from original appraised value and go Option A Select -- no appraisal, no verifications, no nothing. Fannie is going to replace program in July.
