A no-valuation refinance can help you save money upfront on your new mortgage. In particular, borrowers with an FHA loan, VA loan, or USDA loan can easily take advantage of an unassessed refinance. An appraisal exemption shortens the valuation process because buyers who qualify for an exemption may skip the in-person visit of an authorized appraiser. Instead, the lender will use the data provided by an automated insurance system to determine the value of the home being sold.
This information will include the prices of recent sales of nearby homes and any data from previous sales of the home the buyer is buying. For certain loan cases, DU offers the possibility to accept the price (exemption from valuation), in which case an appraisal is not necessary. In the case of loans that do not qualify for the acceptance of the value (valuation exemption), DU will require that the appraisal be recorded on the appraisal report form corresponding to the type of property being appraised. If you are applying for a mortgage that requires an appraisal and the valuation is lower than the one offered, you will not receive the mortgage.
A cash-out refinance involves replacing the existing mortgage and mortgage lender with a larger loan amount and then keeping the difference between the two loans. While most initial mortgage loans require an appraisal, there are some cases where refinancing an existing mortgage may not require an appraisal. An unappraised refinance loan may be referred to as an unappraised mortgage, but a first-time mortgage and a mortgage refinance work differently, and the reasons for offering each of them without appraisal are different.
