Refi question - automated appraisal?

[Susie]

We're in the middle of refinancing our house from an FHA loan to a conventional loan, and are pretty close to the 80% LTV mark.  By my estimate, we're around 75% LTV, but it depends so much on the appraisal.  

We just got one email from our lender that said we'd be contacted by the appraiser for scheduling, and then a second, correction email that said to strike that, that our loan was selected by their system for automated evaluation of the property so the appraisal is waived.

I'm hesitant to ask them, because no appraisal means no appraisal fee!  But curious if anyone knows, since we don't have a TON of breathing room on LTV ratio for a conventional loan... how would they do an automated evaluation?

[madisen]

That's correct, no appraisal = no appraisal fee! Congrats = )

FNMA and FHLMC (the agencies that set up the rules basically for conventional conforming agency loans) both have an algorithm in their AUS (automated underwriting systems) that flag specific loans for not needing an appraisal.

If you were sent disclosures with a value estimate of 75% or so, that's the value that was run through the AUS and agreed to by FNMA/FHLMC. If by any chance they made a mistake and ran a different value through, the lender will have 3 days to disclose that information to you in writing through a COC (change of circumstance) with a new LTV.

[5thofjuly]

We just did the same thing. Our lender told us that our credit scores + general values in our neighborhood were good enough to skip the appraisal.

[Susie]

Cool, I didn't know it was a thing! I gave them my best good faith estimate on what the house is worth (based on sales of the most similar houses in our neighborhood in the last 2 or so years), and using that value and their estimated loan amount (which assumes bringing no cash to the table) we are at an even 75% LTV. Those are the numbers they used on the whole packet of docs that we signed. We'd have been ok if the house appraised a little lower than I thought, but it's nice not to have to worry.

[dancingirl21]

We just refinanced and our lender was hopeful that we would get an automated appraisal but we didn’t. There are a couple of recent bad comps in the neighborhood so she thinks that’s why it didn’t pull automatically. But congrats! No appraisal fee