Is an Appraisal Required for a Refinance?

The majority of first-time home purchases require home appraisals before buyers can close the deals. But what about refinancing? Some homeowners wonder if they need to have appraisals done if they only want to refinance their current mortgages. That question doesn’t have a definitive answer. They could need one, or they could request a waiver under certain circumstances. It really depends on the type of refinance they’re trying to perform and whether or not they meet the guidelines to request a waiver on the matter. Those who qualify for appraisal waivers get to enjoy saving up to $700 in expenses and several weeks of time when they’re trying to close.

The Concept of Appraisal Waivers

Both Fannie Mae and Freddie Mac offer homeowners the option to request appraisal waivers under certain circumstances if they want to refinance. Some purchasers have the option to request it, as well. Both entities have different requirements that homeowners must meet before they become eligible to request a waiver.

Fannie Mae Appraisal Waiver Requirements

Freddie Mac requires the applicants to have a one-unit property. The loan or case file must receive an eligible recommendation, as well. They offer appraisal waivers for a primary home or second home up to 80% LTV/CLTV. They also do rate-term refinances up to 90% LTV/CLTV for a primary or secondary home and 75% LTV/CLTV for an investment property.

Freddie Mac Appraisal Waiver Requirements

Freddie Mac does not allow investment properties to qualify for the appraisal waiver. They do offer their applicants to request appraisal waivers for purchase transactions with LTV/TLTV less than or equal to 80% and cash-out refinance transactions with LTV/TLTV less than or equal to 70%.

Situations That Don’t Require Appraisals

Some situations don’t require an appraisal at all. For example, FHA to FHA refinances and VA IRRRL do not require appraisals. FHA, HIRO and VA streamline programs don’t require them either.

The short answer to the question of whether refinance deals require appraisals is no. Not all of them do. However, interested parties should contact a reliable expert for the information that pertains to their unique situations.

Contact one of our loan consultants to learn more.