When buying a house it’s important to know your options. Oftentimes, homebuyers are new to this process and unless they have the right lender they can miss opportunities that they didn’t even know were options. One of those alternatives is a lender appraisal waiver in Utah.
Your lender will inform you if you qualified for an appraisal waiver on the purchase or refinance of your home. Our professionals will answer all of your questions and help you make the most informed decision when it comes to appraisal waiver requirements and options in Utah. There are many circumstances where you might be granted an appraisal waiver, but you might still want an appraisal regardless, especially if you are purchasing a home. Let’s first discuss what an appraisal waiver is.
What is an Appraisal Waiver?
So what is a lender waived appraisal? In 2017, Fannie Mae began the waiver program. This allows homebuyers to purchase a home and get a mortgage without getting a professional appraisal of the property. Using Fannie Mae’s database, qualified homebuyers are issued a property valuation saving them the expense of an appraisal. The property must be found in Fannie Mae’s database to be considered. Other requirements are needed as well.
What are the appraisal waiver requirements in Utah?
What are the appraisal waiver requirements in Utah beyond being found in Fannie Mae’s database? According to Fannie Mae, you must meet the following criteria:
- Loan case files that receive an Approve/Eligible recommendation
- One-unit properties, including condominiums
- Limited cash-out refinance transactions:
- Principal residences and second homes up to 90% LTV/CLTV
- Investment properties up to 75% LTV/CLTV
- Cash-out refinance transactions:
- Principal residences up to 70% LTV/CLTV
- Second homes and investment properties up to 60% LTV/CLTV
- Purchase transactions:
- Principal residences and second homes up to 80% LTV/CLTV
- Principal residences in “high-needs rural” locations identified by FHFA up to 97% LTV/105%CLTV (for borrowers at or below AMI), contingent on home property inspection
- Recently constructed property (i.e., new construction that is 100% complete) when there is an existing “as is” prior appraisal for the subject property (see Selling Guide B4-1.4-10, Appraisal Waivers, as updated June 3, 2020)
- The majority of transactions will not receive an appraisal waiver offer, which means they will require an appraisal by a qualified residential appraiser to establish the market value.
Who does Not qualify for a lender waiver appraisal in Utah?
According to Fannie Mae there are certain people who would not qualify for a waiver appraisal. Here’s who won’t qualify:
- When the lender has any reason to believe an appraisal is warranted
- Construction and construction-to-permanent loans
- Two- to four-unit properties, cooperative units, and manufactured homes
- Loan casefiles in which the value of the subject property provided to DU is $1,000,000 or greater
- HomeStyle® mortgage products (Renovation and Energy)
- Texas 50(a)6 loans
- Leasehold properties, community land trust homes, or other properties with resale restrictions
- DU loan case files that receive an ineligible recommendation
- Loans for which the mortgage insurance provider requires an appraisal
- Loans for which rental income from the subject property is used to qualify
- A transaction using a gift of equity
Should I Get An Appraisal Waiver?
Now that we’ve covered the requirements of an appraisal waiver in Utah, let’s talk about the pros and cons. And should you get an appraisal waiver?
Pros of appraisal waivers:
The obvious pro of getting an lender appraisal waiver in Utah is that you can save hundreds of dollars on an appraisal. Additionally, you may be able to close on your house sooner because you won’t have to wait on scheduling an appraisal. Typically, it can take a little while to schedule the appraisal and then you have to wait for the report. Without an appraisal, you’ll save money and time.
Cons of an appraisal waiver:
The cons are that Fannie Mae’s database relies on old data. Meaning, you may not be getting the most accurate valuation of your property and your lender won’t be responsible, you will.
Most properties are upgraded through the years as well as the locations surrounding them. If you’ve redone your basement or upgraded your kitchen, these will not be added to the valuation. Your house could then be sold for less than its actual worth.
Additionally, most appraisals are only $500, and while that may seem like a lot, losing money on your house from an outdated appraisal will cost you more.
If you are purchasing your house it is a good idea to have a real person tell you if you are making a good investment or not, instead of being randomly selected by a computer for a waiver. It is helpful to have a professional validate your decision.
Contact ExcelAppraise To Know If A Lender Waived Appraisal Is Right For You
At ExcelAppraise, our professionals know how to answer your questions when it comes to lender waiver appraisals. If you qualify for an appraisal waiver, we’ll let you know if it is right for you and what all of your other options are. Don’t rely on old data, rely on a licensed expert you can trust. Call us at 1-801-882-2292 or request a free quote today!