When should a mortgage broker order an appraisal?

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I live in Washington State. In August we found a house to buy and started using a mortgage broker we felt comfortable with for our home loan. All was going well, he even gave the sellers agent a approval letter, until he actually tried to get the loan, then all of the sudden he couldn’t find one and we had to switch to a company that had more loan programs available to them. Anyways it turns out that he ordered an appraisal without even having a lender willing to take our application (In his words he ordered it when all looked like it would go through) Once we switched mortgage brokers, the new lender we were going with wanted their own appraisal which was paid for out of closing. Now the original broker is questioning us about paying for the first appraisal. Seems to me he jumped the gun and should eat the cost himself. Anyone know what the standard practice is here in my state?

My fiance and I went to apply for an FHA mortgage today in the state of Indiana. The mortgage company was Bank of America Home loans. After we inquired, she told us that the 10% or $ 8000 credit could not be used as an additional down payment and towards closing costs, on top of the 3.5% we’ve got.

This seems to contradict everything I am reading, including the Washington Post. She stated we would receive it as a tax credit next year. We were really hoping to use it towards the down payment. Is she correct?

  1. Reply
    January 21, 2011 at 7:22 pm

    you should pick up the yellow pages…and ask a local appraiser. most states it’s 300-500 ..depending on the loan size.

    make sure that there was an appraisal done also before paying. try to see if you can have the appraisal transferred to the new lender.

    be careful if the new lender can’t approve you…then you will be paying for 2 appraisals.

    if anything i would agree to pay half…out of good faith

  2. Reply
    January 21, 2011 at 7:29 pm

    I agree- he needs to eat it!

  3. Reply
    January 21, 2011 at 8:05 pm

    If he specifically told you he was ordering an appraisal and you’d have to pay for it BEFORE he ordered it, then you should pay for it as agreed. However, if he ordered it on his own; based on his feeling he could get you an approval; and then couldn’t get that approval…then I feel that’s his responsibility.
    Typically we won’t order an appraisal until after we get an approval from an underwriter, it sounds like he ordered one before he had that. If that’s the case, I’d only pay if he had fully explained what type of approval he had and I had agreed to pay for that appraisal specifically before he ordered it.

  4. Reply
    January 21, 2011 at 8:27 pm

    you cannot use the tax credit for the down payment..but there is other options. look up the state of indian dream ownership program. For example i live in ga and the state is offering that program. if you qualify for a fha loan and you take a 1st time buyers class they will give you 14,000 towards your down payment on a for-closed home. just keep searching!! good luck!! its stressfull

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