Appraisal Waivers on Conforming Mortgages

Some conforming mortgages for refinances or home purchases may not require an appraisal. It all boils down to what the response is from Fannie Mae or Freddie Mac’s automated underwriting systems on whether or not an appraisal is required. You may have perfect credit and tons of equity in your home, yet no appraisal waiver if Fannie or Freddie’s underwriting systems determine it’s not eligible.

Your next conforming mortgage might be eligible to not have an appraisal if it meets the following criteria:

  • Single family dwelling, including condos.
  • Primary Residence
    • Purchase: up to 80% total loan to value. (NOTE: total loan to value includes second mortgages and total HELOC credit limits).
    • Rate/Term or Limited Cash Out Refi: up to 90% total loan to value
    • Cash Out Refi: up to 70% total loan to value
  • Second Homes
    • Purchase: up to 80% total loan to value
    • Rate/Term or Limited Cash Out Refi: up to 90% total loan to value
    • Cash Out Refi: up to 70% total loan to value
  • Investment Property
    • Rate/Term or Limited Cash Out Refi: up to 75% total loan to value.

Here are some factors that may cause the loan to not be receive an appraisal waiver:

  • 3-4 unit property
  • Manufactured home
  • Rental income is needed to be used for qualifying
  • If mortgage insurance is required and the PMI issuer requires an appraisal
  • If the underwriter determines an appraisal should be required.

Not having an appraisal required can be a nice feature since it reduces the closing cost and is one less step from the mortgage process. A majority of my clients have benefitted from not having to have an appraisal, which I’m sure they especially appreciate during a pandemic.

Whether or not an appraisal may be required is determined after the initial loan application is submitted, the credit report is ran and the application is submitted to the automated underwriting system of Fannie Mae or Freddie Mac. Sometimes Fannie or Freddie might not provide a waiver, so it’s nice to have both options available to submit a scenario to try to obtain the appraisal waiver. You should wind up with an answer on whether or not an appraisal is required pretty quickly after completing the loan application.

If you are buying a home and your application qualifies with an appraisal waiver, you may want to consider going forward with the appraisal, depending on your scenario and if you want to rely on the opinion of the appraiser for the value of your new home. The decision is ultimately up to you as the home buyer.

If you are interested in buying or refinancing a home located anywhere in Washington state, my team and I are happy to help you! Click here to start the preapproval process or here for a rate quote based on your scenario.

Mortgage Rates Still at Extreme Lows

Freddie Mac’s weekly survey of mortgage rates show that interest rates are still at extremely low levels although I have noticed rates bouncing around a bit more this past week.

From Freddie Mac’s press release:

“Despite the recession, the very low mortgage environment has spurred many first-time homebuyers to jump into the real estate market,” said Sam Khater, Freddie Mac’s Chief Economist. “In August, first-time homebuyer activity rose 19 percent from July to the highest monthly level ever for Freddie Mac. The first-time homebuyer driven rebound in the housing market has come at a critical time for the economy.”

Please remember, these rates are an average from last week, in other words, they are old news. Mortgage rates change throughout the day, sometimes several times as mortgage rates are based on bonds (mortgage backed securities). Click here for current rates for your Washington home.

If you are interested in refinancing or buying your first, move-up, move-down, investment or second home located anywhere in Washington state, please contact me! My team and I are happy to help you. Click here to start the preapproval process for your refi or home purchase. 

 

FHFA delays Refi Tax until December 1, 2020

The Federal Housing Finance Agency that oversees Fannie Mae and Freddie Mac (conventional lenders), has announced they are delaying the “adverse market fee” until December 1, 2020.

There was significant balking across the mortgage industry when the FHFA announced the fee back on the evening of August 12th which effectively went into effect immediately on new refi’s (since it’s based on when loans are delivered to Fannie Mae or Freddie Mac). This was essentially a 0.5% tax on mortgage lenders existing pipelines – some loans in the pipeline were not able to have the 0.5% hit factored into the pricing of the interest rate. [Read more…]

Extremely Low Mortgage Rates trending higher

Freddie Mac released their PMMS (Prime Mortgage Market Survey) this morning stating “Mortgage Rates Inch Up“.  Even if mortgage rates have bounced slightly higher, they are still ridiculously low. PLEASE REMEMBER: the PMMS data shown in the picture is old news! This is from an average of rates from last week. If you would like current rates for your scenario on your home located in Washington, click here.

[Read more…]

Federal Housing Finance Agency issues half-point fee on conventional refinances

Fannie Mae and Freddie Mac (regulated by the Federal Housing Finance Agency) announced they are adding an “Adverse Market Refinance Fee” of 50 basis points that is effective on refinance mortgages delivered to Fannie Mae or Freddie Mac starting September 1, 2020.  This is a huge hit to mortgage lenders across the country. [Read more…]

Surprise! It’s a strong Jobs Report

May’s Jobs Report came in much better than expected this morning with 2.51 million jobs ADDED vs the anticipated the 8.5 million jobs lost. Personally, this sounds too good to be true to me and I’m thinking that we’ll see corrections in the months to come…of course, I hope I’m wrong and that an economic (and health) recovery is here. [Read more…]

Forbearance Guidelines Updated for Conventional Financing

This week Fannie Mae and Freddie Mac updated guidelines for how soon home owners can obtain a new mortgage if they have entered into a forbearance agreement with their current lender. Most of the focus with this program is that it’s not suppose to impact their credit score. Although the credit score may not be impacted, the credit report reflects that payments were not made on the mortgage. It seems that many home owners are not aware that taking advantage of not having to make mortgage payments will impact their ability to get a new mortgage for refinancing or buying a new home [Read more…]

Mortgage Rates at an All Time Low

Freddie Mac’s weekly mortgage rate survey, Prime Mortgage Market Survey (aka PMMS) revealed the lowest mortgage rates since Freddie Mac started tracking interest rates in 1971.

“The size and depth of the secondary mortgage market is helping to keep rates at record lows. These low rates are driving higher refinance activity and have modestly helped improve purchase demand from their extremely low levels in mid-April,” said Sam Khater, Freddie Mac’s Chief Economist.

Remember, Freddie Mac’s PMMS report is based on mortgage rates from last week. Last week’s rates are old news and no longer available…although with that said, mortgage rates are still extremely low right now

We are open for business and here to help you with your refinance or home buying needs for homes located in Washington state. Please contact me if I can help you! Click here for a no-hassle mortgage rate quote or here to start a loan application.