Home Appraisal Transfer From One Mortgage Lender To Another Lender
This BLOG On Home Appraisal Transfer From One Mortgage Lender To Another Lender Was PUBLISHED On May 7th, 2019
There are many instances where borrowers need to change lenders during the mortgage process with their current lender.
- A home appraisal should never be ordered unless the loan officer is fully confident that the home loan will close
- Most loan officers who are not experienced will often issue a pre-approval without properly qualifying their borrowers
- The number one reason for a last minute mortgage denial and/or stress during the mortgage process is because the loan officer did not properly qualify their borrowers
- Transferring from one lender to another during the mortgage process can be done
- However, the mortgage process needs to start all over
- The home appraisal is one of the costs that need to be absorbed by the home buyer prior to closing
- Most appraisals will cost between $450 to $500
- A home appraisal transfer is allowed on VA and FHA Loans
In this blog, we will discuss home appraisal transfer when borrowers change lenders during the mortgage process.
Home Appraisal Transfer Process And Guidelines
- However, the only Home Appraisal Transfer allowed are on FHA and VA Loans
- FHA Home Appraisals are the premium appraisals
- If a home buyer has a certified FHA Appraisal, they can do an FHA Home Appraisal Transfer with any other lender on FHA Loans
- FHA Appraisals can also be used on conventional, VA, and NON-QM Loans in the event if the borrowers decide to change loan programs with a different lender
- Most loan programs will honor an FHA Home Appraisal Transfer
- However, with conventional loans, lenders will not honor a conventional appraisal transfer
- What this means is if you got a conventional appraisal completed with one lender and want to change lenders, the original conventional appraisal will most likely not be honored with the new lender
- VA appraisals can be transferred from one lender to another lender
Changing Lenders During Mortgage Process
Changing lenders during the mortgage process is very common.
- There are countless of reasons why borrowers change lenders during the mortgage process
- It can be due to personal reasons where loan officers are not returning borrowers’ calls promptly
- It can be due to a last-minute mortgage denial or stress during the mortgage process
- Or it can be because the mortgage underwriter keeps on coming up with new conditions after conditions
If borrowers have an FHA Appraisal already paid for and completed, that appraisal will transfer when they transfer the FHA Case Number from their original lender to their new lender.
Home Appraisal Transfer Process To A New Lender
Mortgage Borrowers who intend to changing lenders during the mortgage process can do so by requesting to their current lender they intend in switching lenders.
- They should email their loan officer and/or mortgage processor to transfer the case of their FHA Loans to the new mortgage lender
- The FHA case number can easily be transferred from one lender to another lender in a matter of a day or two
- The FHA Home Appraisal will transfer with the FHA Case Number Transfer
- However, if you have a copy of the appraisal, submit it to the new lender
- Under HUD Guidelines, the mortgagee needs to act on an FHA Case Number Transfer Request within five business days of the request
The FHA Home Appraisal Transfer does not need to be transferred by the original lender unless the appraisal has been paid for by the borrower.
Validity Of FHA Home Appraisal Transfer
FHA Home Appraisals is good for four months from the date of the Appraisal Report. There is an expiration date on FHA Case Numbers. If the expiration date has passed, then a re-inspection is required on the home appraisal which is a fraction of the cost of the original appraisal. Updated re-certified FHA Home Appraisals are valid as long as the following conditions apply:
- The same home appraiser re-certifies the original FHA Appraisal
- There are no downward value changes since the original value
- The subject property meet all HUD Property Guidelines and is habitable
- The update must be done before the 120-day expiration
Starting The FHA Case Number Transfer Process To A New Lender
The new lender cannot start the new mortgage process on FHA Loans until the FHA Case Number has been transferred. Michael Gracz, the National Sales Manager at Gustan Cho Associates is an FHA Case Number Transfer Expert. Mike Gracz says the following:
In order for another lender to work on a loan that a previous lender has been working on, the FHA case number must be transferred.. A Loan Originator can ask the new lender to do a case query on FHA Connection in order to figure out what the current FHA case number is. In some cases, the current lender with the case number will ask for a borrower’s authorization and letter of explanation that is signed and dated.
Here is a sample letter borrowers can use when notifying their original lender to stop working on their FHA Loans and transfer the FHA Case Number to their new lender:
To Whom It May Concern:
Please transfer my FHA Case Number To My New Lender (NEW MORTGAGE COMPANY) effective immediately. Here is my Loan Number (ENTER LOAN NUMBER), Social Security, Subject Property Address, Contact Information. Please contact me with confirmation (ENTER ALL CONTACT INFORMATION).
Borrowers and Co-Borrowers Name, Signature, Date