What loan program does not require an appraisal




















Key Takeaways A no-appraisal mortgage is a home loan that doesn't require an appraisal. Many of these loans help troubled borrowers stay in their homes by lowering their monthly payments.

No-appraisal loans are offered by a number of government agencies, including the Federal Housing Administration. Article Sources. Investopedia requires writers to use primary sources to support their work. These include white papers, government data, original reporting, and interviews with industry experts. We also reference original research from other reputable publishers where appropriate. You can learn more about the standards we follow in producing accurate, unbiased content in our editorial policy.

Related Terms No-Appraisal Loan Definition A no-appraisal loan is a mortgage that does not require the property to be assessed for its current market value. Highly unusual for first mortgages on residences, it is more typical when a mortgage is being refinanced. Department of Veterans Affairs for service members, veterans, and their surviving spouses.

If a borrower defaults, then the FHA pays the lender. Partner Links. Related Articles. Mortgage HUD vs. Investopedia is part of the Dotdash publishing family. Your Privacy Rights. To change or withdraw your consent choices for Investopedia.

At any time, you can update your settings through the "EU Privacy" link at the bottom of any page. However, not everyone needs an appraisal to complete the underwriting process. Some lenders routinely waive the valuation for low-risk transactions. If your lender says you don't need an appraisal, it means he has either determined that the loan is low risk, or that he is willing to accept the home's sale price as its estimated value.

Lenders want to protect their investments in case borrowers end up defaulting on their on loans. According to Fox Business , mortgage lenders ideally want to see at least 20 percent equity in your home before they'll loan you money — the more equity you have, the lower your monthly repayment, and the better the bank's chances of selling your home in a foreclosure for at least the outstanding debt amount.

You can learn more about the standards we follow in producing accurate, unbiased content in our editorial policy. Related Terms How Appraisals Work An appraisal is a valuation of property, such as real estate, a business, collectible, or an antique, by the estimate of an authorized person. Assumable Mortgage An assumable mortgage is a type of financing arrangement in which an outstanding mortgage can be transferred from the current owner to a buyer.

Loan Estimate A loan estimate is a three-page form that presents home loan information in an easy-to-read, well-explained format, making it easy to compare offers. No-Appraisal Mortgage A no-appraisal mortgage is a type of refinancing loan that does not require an independent opinion of the property's current fair-market value.

Partner Links. Related Articles. Mortgage HUD vs. Investopedia is part of the Dotdash publishing family. Your Privacy Rights. To change or withdraw your consent choices for Investopedia. At any time, you can update your settings through the "EU Privacy" link at the bottom of any page.

These choices will be signaled globally to our partners and will not affect browsing data. We and our partners process data to: Actively scan device characteristics for identification. I Accept Show Purposes. But you should definitely prepare the house, just as you would for a potential buyer. Make sure everything is in good repair. Clean and organize from top to bottom. A neglected property will likely get a lower appraisal value than one that is well-maintained.

A full home appraisal is required for most purchase loan scenarios. But there are certain refinancing scenarios where it may not be required.



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