Like any mortgage transaction, but maybe even more when it comes to reverse mortgages, the value of the home has never been more important. Unless a borrower’s home meets a certain value, there is a good chance they might not be able to qualify for the loan. An older borrower, especially a retiree on a fixed income, may not have the means to pay $450 for a full appraisal, especially if there’s a chance the valuation won’t be enough for the lender to justify originating the HECM.
Len Fishman, founder of AllReverseAppraisals.com, an appraisal management company that specializes in reverse mortgages told NMN that “I’ve had clients—good, honest brokers— that for 15 years would call me and I’d give them an estimate of what the value would be and we’d see if it’s worth the borrower’s time and money to go forward with the appraisal.” Adding, “now the seniors are having to foot the bill for an appraisal without knowing any range of value or if they’ll qualify for the loan.”
To meet the needs of prospective reverse mortgage borrowers, Coester Appraisal Group, offers a service that creates a valuation repot that’s less expensive than full appraisals.
“Instead of doing the full appraisal and have them pay $450 up front, we do a desktop appraisal,” said Brian Coester, CEO of Coester Appraisal Group. “If it looks reasonable that the borrower could qualify for a reverse mortgage, then we go and do full appraisal and apply the $100 fee from the desktop appraisal to the price of the full appraisal.”
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