Appraisals in the Mortgage Process- The Rules are Changing
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Simply the Best Loans, a blog that I have started reading, has a great article on the use of appraisals in the financing of a home. The lenders have noticed that appraisals have been over estimated recently, and are being much tougher in their analysis.
One of the newest issues with many loans today is lenders reviewing and rejecting appraisals. The appraisal is a ‘’defensible’’ and carefully documented opinion of value. Most commonly derived using recent sales of comparable properties by a licensed, professional appraiser. Since the real estate market has been extremely heated in my area, property values have soared at a rapid rate. Lender’s are beginning to question these values and whether or not they’re realistic.
I believe it’s important for buyers to know that even if you do get a good appraisal and believe the value to be reasonable, lenders have the last word. As they review and underwrite your loan, they also review the appraisal. These days if there is even the slightest question as to value or future re-sale potential, many lenders will reject the appraised value and sometimes they reject the appraisal completely.
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