Updates To Appraisals And Second Homes
It's a big week in the mortgage industry and Jamie Cavanaugh is here to explain why. With two major upcoming changes over the next few weeks, now is the time to prepare and make sure you're getting the best possible deals every time! In this week's video, Jamie explains Fannie Mae's recent announcement regarding appraisals, and the MASSIVE change that's causing anyone buying or refinancing a second home to get started ASAP!
Hey everyone it’s Jamie Cavanaugh with your weekly mortgage update.
The big news this week: Fannie Mae will be accepting desktop appraisals for purchase transactions as of March 19th.
So what is a desktop appraisal and what does this mean? Well a traditional appraisal requires that the appraiser physically go to the property and take photos and measurements, and because appraisers are in short supply, they can only see so many properties in a day and this has caused nationwide delays in getting appraisals completed, and it has also driven the cost of appraisal reports up drastically.
So being able to use a desktop appraisal means that appraisers no longer need to physically visit the property.
This will make the appraisal process faster, easier, and possibly a little bit less expensive.
On the subject of upcoming changes: In the past, rates for second homes were treated the same way that primary residences were, but all that goes away very soon. Effective April 1st, if you’re purchasing or refinancing a 2nd home, there will be a new loan level price adjustment added to the cost of your interest rate!
Think of a loan level price adjustment like this. The same interest rate that comes at no points to you on March 31st, will cost you an additional 1.125% to 4.125% of your loan amount on April 1st.
High Balance loans are also affected with price adjustments ranging from .5% to 1.75% depending on the amount of equity and the type of loan you’re doing.
This is a MASSIVE change in cost and some lenders have already implemented the higher cost structure. So, if you are sitting on the fence waiting to purchase or refinance a 2nd home, or, if your loan balance falls within the high-balance loan limit in your county, now is the time to act.
Thanks for watching, and I’ll see you next week.