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Your Property

When you buy or refinance a home, the property is used as collateral for the loan.

Here's what the lender is looking for and why.

What types of things will an underwriter look for when they review the appraisal?

An Appraiser will provide information on their evaluation of said property via an Appraisal. Appraisers will assess and perform a Comparative Market Analysis (CMA). They will compare the Subject Property (property being used for collateral on the new loan) with other similar properties in the area and assess salability, marketability, and similar attributes within a specific radius of mileage. There are times when a rural property may not be as prevalent as say a property located in an urban area (similarly made homes by the same builder).

The evaluation will reflect at least 3 similar homes that have been sold within a certain amount of months, evaluate similar amount of bedrooms, baths, and square footage. Some homes adding a pool may not have as much of an impact to value as say newly planted sod and improves the overall landscape of a home. The Appraisal form will also reflect statistics about the neighborhood where the property is located and look at the time on the market for homes that have sold recently and verify whether values are steady or increasing. In some areas, additional acreage or outbuildings could actually be detriment to a future sale. Finding comparable properties can be more challenging in rural areas where it is more difficult to find homes that have similar features.

We will also review pictures of the subject property that the Appraiser has gathered and verify information notated within the Appraisal mirrors information that can be obtained from those pictures taken. The Appraiser may have noted information regarding needed repairs whether the property can be sold “as is” or “subject to” as an example. If repairs are required after review, then the underwriter may condition the loan for those repairs to be satisfied before Final Approval may be given based on underwriting guidelines.

 

Will I get a copy of the appraisal?

We will update the information in our system with the newly received value as soon as we receive the completed Appraisal from the Licensed Appraiser. We will promptly provide you with a copy of the completed Appraisal even if your loan does not close since the Appraisal must generally be paid for before we can order the Appraisal.

 

Are there any special requirements for condominiums?

There are some additional steps that must be taken to determine if condominiums meet our guidelines since the value and marketability of condominium properties is dependent on items that do not apply to single-family homes.

Another word used in the mortgage industry synonymous with describing the name “Condominium” is also called a “Project”. Some of the most important factors when analyzing the attributes or when reviewing special requirements for Condominiums is the age of the Project, the percentage of completion, and the percentage of units non-owner occupied verses owner occupied. The project must be at least 90% of completion to ensure that all units are subsequently built and decreases the chances of incomplete work, quality, and impact to marketability of said unit(s) for financing. Any impact to marketability ultimately impacts value that results in an impact to the amount a lender may finance.

We will also carefully review the Appraisal to insure that it includes comparable sales of properties/units within the project and similar properties/units in other nearby and similar projects. Our experience has found that using comparable sales from both the same project as well as other projects provides us a better assessment of the condominium project’s true marketability and overall value.

 

I'm purchasing a home, do I need a home inspection AND an appraisal?

Both a home inspection and an appraisal are designed to protect you against potential issues with your new home. Although they have totally different purposes, it makes the most sense to rely on each to help confirm that you've found the perfect home.


The appraiser will make note of obvious construction problems such as termite damage, dry rot or leaking roofs or basements. Other obvious interior or exterior damage that could affect the salability of the property will also be reported. However, appraisers are not construction experts and won't find or report items that are not obvious. They won't turn on every light switch, run every faucet or inspect the attic or mechanicals. That is why it is imperative that the home inspector completes a thorough home inspection. They generally perform a detailed inspection and can educate you about possible concerns or defects with the home.

Accompany the inspector during the home inspection. This is your opportunity to gain knowledge of major systems, appliances and fixtures, learn maintenance schedules and tips, and to ask questions about the condition of the home.

 

I've heard that some lenders require flood insurance on properties. Will you?

Federal Law requires all lenders to investigate whether or not each home they finance is in a special flood hazard area as defined by FEMA, the Federal Emergency Management Agency. The law can't stop floods. Floods happen anytime, anywhere. But the Flood Disaster Protection Act of 1973 and the National Flood Insurance Reform Act of 1994 help to ensure that you will be protected from financial losses caused by flooding.

We use a third party company who specializes in the reviewing of flood maps prepared by FEMA to determine if your home is located in a flood area. If it is, then flood insurance coverage will be required, since standard homeowner's insurance doesn't protect you against damages from flooding.

 

Does Mobiloil Credit Union provide financing for manufactured homes?

We do not offer financing for manufactured or mobile homes at this time.

 

How long does it take for the property appraisal to be completed?

No one really wants to hear the answer to this question as it “depends”. It really does depend on a number of factors, such as location of the property (ex. Rural property makes it difficult to find similar properties and properties actually sold within a 12 to 6 month timeframe, type of loan product being financed, and demand of volume of appraisals verses the amount of appraisers to complete the work to name a few. The present timeframe for the completion of an appraisal is approximately 2-3 weeks or more. When the appraiser actually begins the acceptance of the order is another factor to be considered. Just because the order was made and sent to the Appraiser does not necessarily mean the Appraiser is going to work on the order immediately based on that appraiser's current work load.

We try to obtain as much information about the Appraisers in the area and the work load as possible before ordering to provide the very best chance of completing the order within said timeframe. We as a lender are provided the opportunity to follow up with the appraiser to assess a possible ETA and confirm that they are working the orders or have received the order as acknowledgement. Please contact the Mortgage Originator or Loan Processor if the Appraiser has not been out to your property or contacted you to setup an appointment within 7 business days. The appraiser will generally contact the real estate agent, if either you or the seller is using an agent or the seller directly to schedule an appointment to view and assess the value of the home.

 

What is an appraisal and who completes the appraisal?

An appraisal will generally be required to determine the value of the property you are purchasing or refinancing. National Standards for the completion of an Appraisal govern the format for the actual appraisal document and specify the appraiser’s qualifications and credentials. States have licensing requirements for appraisers evaluating properties.

The appraiser will create a written report for us and we will promptly provide a copy of the appraisal even if your loan does not close. Your Mortgage Loan Originator or Loan Processor will provide a copy at the earliest of receipt of the document.

Usually the appraiser will inspect both the interior and exterior of the home. Determining whether an interior or exterior inspection or both will be required will depend sometimes on the type of loan product and circumstances.


After the appraiser inspects the property, they will compare the qualities of your home with other homes that have sold recently in the same neighborhood. These homes are called "comparables" and play a significant role in the appraisal process. Using industry guidelines, the appraiser will try to weigh the major components of these properties (i.e., design, square footage, number of rooms, lot size, age, etc.) to the components of your home to come up with an estimated value of your home. The appraiser adjusts the price of each comparable sale (up or down) depending on how it compares (better or worse) with your property.

As an additional check on the value of the property, the appraiser also estimates the replacement cost for the property. Replacement cost is determined by valuing an empty lot and estimating the cost to build a house of similar size and construction. Finally, the appraiser reduces this cost by an age factor to compensate for depreciation and deterioration.

If your home is for investment purposes, or is a multi-unit home, the appraiser will also consider the rental income that will be generated by the property to help determine the value.

Using these three different methods, an appraiser will frequently come up with slightly different values for the property. The appraiser uses judgment and experience to reconcile these differences and then assigns a final appraised value. The comparable sales approach is the most important valuation method in the appraisal because a property is worth only what a buyer is willing to pay and a seller is willing to accept.

It is not uncommon for the appraised value of a property to be exactly the same as the amount stated on your sales contract. This is not a coincidence, nor does it question the competence of the appraiser. Your purchase contract is the most valid sales transaction there is. It represents what a buyer is willing to offer for the property and what the seller is willing to accept. Only when the comparable sales differ greatly from your sales contract will the appraised value be very different.


Have a question? Email us: mortgageloanoriginators@mofcu.org , give us a call at 409.924.5213, Toll Free at 800.892.1111 or  stop by a location close to you for any questions you may have. We’re here to help Monday - Friday 8am-5pm CST.