Borrowers often wonder why lenders require an appraisal when they are refinancing or if there is a way to skip the appraisal altogether.
An appraisal is a property valuation that considers similar properties that have sold in the last sixty to one hundred and twenty days. Depending on the final appraised value, a refinance application will either get approved or declined. This is because to refinance a property, besides meeting income requirements, a mortgage loan must also not exceed 80 percent of the property’s value. Therefore, ‘appraised value’ is critical in the re-mortgaging process.
Fortunately, some lenders do not require appraisals should an AVM support the property’s value. AVM stands for the ‘Automated Valuation Model.’
AVM is a computer program that can provide market analysis, and property value estimates. If the AVM can support a property’s value, lenders will not require a physical appraisal.
Appraisals can cost anywhere from $250 to $600 to complete, whereas an AVM is usually $99 and gets subtracted from the net mortgage advance amount.
Find out if your property can qualify using an AVM today!
Sarah A. Colucci
Mortgage Edge, Broker 10680
Direct: (647) 773-4849
By: Sarah Colucci
411 Queen St.
15 Wertheim Court, Suite 210
Richmond Hill, Ontario
Sarah A. Colucci, Mortgage Agent Lic. M14000929
Mortgage Edge, FSCO Lic. 10680