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Ivo, Home Buyer in Texas

Lender says Home Appraisal not needed

Asked by Ivo, Texas Tue Jun 26, 2012

I'm buying a >300k house with 37% down payment. My mortgage broker says that our lender told him that they don't need a home appraisal for mortgage approval. Our broker says that this is very unusual and that it's a good thing. Our realtor says he has never heard of this before and doesn't have an explanation for us. Is it really a good thing if so could you please explain how? or should I go ahead and get a appraisal done anyway. Thanks.

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Answers

9
True, Barbara is correct. This happens on refinances as well. Depending on the automated approval findings appraisals are not always necessary. In your case you may want to have one done for piece of mind. Granted you are saving $400 by not needing an appraisal but if you are concerned about the value you may still ask to have one done.

Again you are a willing buyer at the current price and the lender is OK with it... as long as this is not a new build home from a home builder using their own financing I would say you are just fine without one.

Best of luck to you.

_______________________________________
Don Groff
REALTOR® | Mortgage Broker
Keller Williams Realty | 360 Lending Group
o 512.669.5599 m 512.633.4157
listings@dongroff.com | http://www.AustinListed.com
0 votes Thank Flag Link Sat Jul 7, 2012
Barbara's answer below is correct....

Some of the others are WRONG!!!
0 votes Thank Flag Link Wed Jun 27, 2012
If it were me I would ask the lender to order an appraisal anyway. The law that requires independent status for the appraiser is an absolute pain in my neck but it does increase the protection for the borrower so from that perspective it is a good thing.

Jim Simms
NMLS # 6395
JSimms@cmcloans.com
Financing Kentucky One Home at a Time
0 votes Thank Flag Link Wed Jun 27, 2012
When a loan application is run through Fannie's or Freddie's automated approval system, the results tell us what type of appraisal is required. What you got was an "appraisal waiver," meaning that Fannie accepts the value as the sales price. You can still ask for an appraisal if you are concerned about the value. It takes a strong buyer with a substantial down payment to get this result. It's up to you on whether or not you still want to spend the money on the appraisal.
Barbara Coker
NMLS#228545
Licensed Mortgage Loan Officer
100% Home Loans All Over Texas For 30 Years!
Web Reference: http://www.thecokerteam.com
0 votes Thank Flag Link Wed Jun 27, 2012
A Home Appraisal is necessary to know the value of what you are purchasing. Maybe the Lender
you are talking with has decided to look at your loan differently. Unsecured vs Secured.
There are foreclosed properties seller provides the appraisals ..... Try to know the details to this
situation in writing. What is the Lender basing the leverage of the loan on?
How can you be sure of value of subject property without a licensed appraiser's unbiased report ?
You ideally want the loan to be federally insured or know the reasoning otherwise.
0 votes Thank Flag Link Wed Jun 27, 2012
That's an odd situation for sure. Besides Fannie Mae, I don't know of a lender that will waive a home appraisal, unless you put down at least 40-50%.
Web Reference: http://www.archershomes.com
0 votes Thank Flag Link Wed Jun 27, 2012
It's rare, but the appraisal is for the lender, not for you.
If they're comfortable with the price and lending without an appraisal that's a great thing.
Probably means you got a very good price and combined with the large down payment they're comfortable with values.

I would not waste my money on an appraisal for the lender.

Is your realtor comfortable with the value?
Are you comfortable with the value?

If so, I don't think the appraisal will tell you anything. The trick is, let's say the house is really worth $350,000, but you're paying $300,000. The appraisal will likely come back at $305,000. So what does that tell you? Nothing really. Rare do I see the appraisal come back at what everyone would agree is the real market value when the purchase price and value vary greatly like that.

I've had two borrowers this year that did not have to get an appraisal.

Feel lucky....that you get to keep the $400 or so and not give it to the bank. Go enjoy a nice dinner and night on the town, or put it towards your principal.
0 votes Thank Flag Link Tue Jun 26, 2012
Bruce Lynn, Real Estate Pro in Coppell, TX
MVP'08
Contact
They are likely using an AVM(automated valuation model) to determine your appraised value given the large down payment and likely other positive factors in the file.

I haven't seen one done this way in yrs... didn't know they were still available with all of the lender guideline overlays.

Good deal.
0 votes Thank Flag Link Tue Jun 26, 2012
If you have a good market analysis with good comps, and you are sure you haven't overpaid for the area or condition of your new home, and the lender is satisfied to put their money at risk without the appraisal, then there is no need to purchase an appraisal that I can see.
0 votes Thank Flag Link Tue Jun 26, 2012
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