Automated Appraisals - Underwriting Fundamentals 101
Automated Appraisals
I want to talk to you today about automated appraisals.
This is not something that every lender has, but a lot of lenders do, and there are a couple of benefits.
There's pros and cons actually, you need to be aware of all the benefit of automated appraisals.
It's fast - instant.
We know right away if the value of the purchase or the refinance is supported based on the automated appraisal using the lender's automated valuation model/avm appraisal tool.
Okay, So that's a good thing. Also, the cost can be lower.
The lender still charges for automated appraisals, but it's a lot less than a full appraisal, right?
The cons are - if you have done a lot of renovations to the property and automated appraisals don't recognize that.
Having a full appraisal will because they will factor in all the renovations and that will help boost your property's value more than automated appraisals would.
So you really have to consider how much equity you need from the property.
And if it's not enough based on the automated appraisal, then we'll use the full appraisal.
But again, the other one is the full appraisals can cost a lot more money depending on the size of the house.
That's really how they do it.
It's only a couple hundred dollars.
If it's a smaller house, prices go up to like a thousand for a luxury, you know, huge mansion style home.
So depending on your circumstances, you would be paying more for the full appraisal. But if you need that equity, it might make sense.
Talk to a Mortgage Professional
Often, by using a lender's automated valuation model real estate investors can draw out a significant amount of their property's equity very quickly.
However, that does come at the risk of missing out on some of the property's hard-earned equity by using automated appraisals.
So, which one is better? The truth is it entirely depends on your goals as an investor.
So, instead of trying to give you a single recommendation, we want to offer you a free strategy call to begin weighing your options based on your specific portfolio and needs.
To get started today, simply click the link below and book your call right now.