An appraisal is not always necessary when it comes to getting a mortgage. In some cases, lenders may be willing to forgo a new appraisal if the market value of the home was recently calculated. This is especially true when refinancing a home. If only a short time has passed since the original appraisal, lenders may be willing to skip the in-person appraisal.
However, certain government programs such as the Federal Housing Administration (FHA), Department of Veterans Affairs (VA), and U. S. Department of Agriculture (USDA) may exempt you from needing an appraisal for your mortgage. In some cases, an appraisal may not be required due to certain factors. For example, if the mortgage company is unable to find an appraiser willing to appraise the house due to its unusual nature (such as a converted barn or detached two-story house), they may not require an appraisal.
Additionally, if you are refinancing your mortgage, you may be able to reduce your annual mortgage insurance premium (MIP) to 0.5% of your loan amount without needing an appraisal.
Rocket Mortgage, LLC, Rocket Homes Real Estate LLC, RockLoans Marketplace LLC (operating as Rocket Loans), Rocket Auto LLC, and Rocket Money, Inc. are all examples of companies that offer mortgages without appraisals. When it comes to getting a mortgage without an appraisal, lenders will take into account the credit histories of borrowers and how much each of them owes for their current mortgages. The federal government insures FHA mortgage lenders against losses so that banks can offer you the lowest FHA interest rates even if an appraisal is not required. For current FHA loan holders, simplified FHA refinances are another type of unappraised FHA mortgage loan. For those looking for a conventional loan option for an unappraised loan, Fannie Mae HomePath mortgages are available.
These mortgages allow buyers to purchase a home with no appraisal, no PMI, and with a low down payment. It's important to note that while there are certain circumstances where an appraisal is not required, it is still necessary in most cases. An experienced loan agent is much more likely to complete a successful loan application the first time and give you a better chance of getting automatic approval. Not having an appraisal could lead to big problems down the road if you're trying to refinance the home.