Today I want to talk with you about how the appraisal process and the mortgage loan application process work.
When the purchase contract comes in, all initial loan disclosures have been signed, and we have the intent to proceed as a lender, we will order an appraisal on the property.
Since Dodd-Frank and mortgage reform, all mortgage lenders have to go through an appraisal management company. We will place our order through the appraisal management company and then they will contract with the appraiser.
As the lender, we will not know who the appraiser is on the property until we actually get the report. This ensures that there is no coercion of value. Also, it guarantees nobody has reached out to the appraiser and provided any information that could sway their opinion of value. This makes it so the lender can be sure that they are getting the most accurate depiction of the value of the property.
This process also protects the buyer as well from any coercion of value from either side of the transaction.
Once the appraisal comes back, it is reviewed and then it can be released to all parties in the transaction for review.
If you have any other questions about the appraisal process or the cost of an appraisal in the home buying process, please feel free to reach out to me by phone or email. I would be happy to speak with you about it.