Stupid question about appraisal...

[Ca6898]

When the loan officer orders the appraisal, does that mean he already locked in the rate, and the borrower has been approved?

[RESteve]

When the loan officer orders the appraisal, does that mean he already locked in the rate, and the borrower has been approved?

Not necessarily. You are referencing three different stages of the process.

In my experience, in most cases to lock in a rate you only need to have an address and to pre-qualified for a loan. This varies from lender to lender, however.

You will be fully approved when the lender has verified all assets, income, and credit. You will get your clear to close when the underwriter issues all conditions and they are fully satisfied.

The appraisal is ordered due to a condition from the underwriter. The loan officer may take the money in advance to pay for this when it's needed, or will ask to pay for it when it's due. You can lock in a rate without an appraisal. If the appraisal is ordered, not all conditions (unless it's the last one) has been satisfied, and also remember that the home has to appraise for the financed amount.

So to answer your questions - when an appraisal is ordered that does not mean you are fully approved (speaking in terms of ready to close on a home). I've had loan officers order jump the gun and order appraisals before repairs were negotiated. Even though the deals closed, what would of happened if we would of used a contingency to cancel the deal; that money would have been wasted! Also, just because the appraisal is ordered doesn't mean the rate is locked in.

The rate should be locked in immediately IMO, however there are special circumstances where the loan officer predicts for the rates to fall so they won't lock it in until the last minute. I'm more conservative and say just lock it in ASAP to avoid rate increases.

Once you are locked into a rate, even if it goes up or down, you are locked in. It's a risk everyone has to take.

These are my experiences. If anyone has any different experiences, please share!

[Ca6898]

You will be fully approved when the lender has verified all assets, income, and credit.

Do you really need all those things when going stated, besides a good FICO?

[RESteve]

Do you really need all those things when going stated, besides a good FICO?

Oh; no in that case just your score and the job title you have has to check out with average salaries of the area.

I'm not really a mortgage professional so I can't give more insight than that. I'm sure there are some loan officers lurking around here that can give you a better answer. Anyone?

[Mortgagee]

Typically we cannot submit a file for full approval until an appraisal has been received. Since there is nothing to underwrite on a Stated Income / Stated Asset your credit score / job history / and appraisal are the only things underwritten (appraisal being the only thing tangible to review.) Hopefully you are working with a reliable, knowledgeable loan officer and they know their stuff so they have you targeted for a program your credentials meet.

Typically on Stated deals there are no snafus as long as you have been upfront and honest about employment and can verify 2 years continuous history.

Your rate has not necessarily been locked unless you have discussed it directly with the loan officer. If you are concerned get a rate guarantee letter from them with the rate, lock period, and date of expiration.

[Katerina]

Steve is correct about your appraisal question.
But no question is a "stupid question" so don't say that about your questions. That is one of the purposes of forums.
Stupid is not asking questions and pretending you know the answers!