June Mortgage Update - Why First-Time Home Buyers Never Seem To Need an Appraisal
Have you ever noticed that first-time home buyers almost never need an appraisal?
Here's why this is, as I find a fear of an appraisal sometimes unnecessarily scares buyers from making a stronger offer.
1) Insured Mortgages (CMHC, Sagen, Or Canada Guaranty) almost never require an appraisal.
If you are putting down the very minimum, chances are you won't need an appraisal because the file is insured.
The insurers will do an AVM (Automated Valuation Model - basically an automated appraisal based on comps), and their algorithm is very forgiving in terms of the range of purchase price.
As long as the home is fine with the insurer, the lender won't care - they have insurance on the mortgage paid for by the customer.
2) The first-time price range has enough data that often an appraisal isn't needed even if the Buyer does not need mortgage insurance.
With many first-time buyers purchasing in the sub $750k range, the lender/banks AVM will usually have enough data based on comparable sales to support the purchase price.
Questions? Are you a first-time home buyer who could use some help? Please reach out!
Have a terrific June, and fingers crossed for a rate drop!
Credits and thank you to Jim Steffler for this information. If you’re looking for a great mortgage agent, consider reaching out to Jim!
Jim Steffler
Mortgage Agent Level 2
Dominion Lending Centres National Ltd.
TEL: 226-338-5136
EMAIL: jim@jimstefflermortgages.com
https://jimstefflermortgages.com