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Old 04-17-2013, 07:44 PM
 
Location: Beautiful place in Virginia
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I was just curious about something. The appraiser for the mortgage works for the lender, I assume. They need to ensure that the lender has the appropriate risk for the value of the home. How about the insurance company?

My appraisal for the house was $10k above contract based upon the lender. However, the appraisal for just to rebuild the house was $500k above the contract, based upon insurance (not counting land).

I'm confused. Why the disparity?
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Old 04-17-2013, 09:18 PM
 
Location: El Dorado Hills, CA
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Mortgage appraisal is what your house is worth on the market. Insurance appraisal is the cost to re-build the house (new) if it burned down or was otherwise destroyed. It typically is more than the market value of the house.
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Old 04-17-2013, 10:04 PM
 
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Mortgage companies use appraisals. The appraisers in NO way work for mortgage companies. Not today. We (lenders) cannot even communicate directly with appraisers, we have to go through an independent 3rd party appraisal management company.

Now, usually when an appraiser is working with a purchase loan, they "stop" when they are able to justify the purchase price. But that is not at the behest of the mortgage company.
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Old 04-18-2013, 04:50 AM
 
Location: MID ATLANTIC
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Different methodologies. One is market value and the other is the cost approach. In any event, the appraisal is the property of the lender. The insurance companies don't do their own appraisal, but use the lender's appraisal. What they will do - their own inspections for completely different reasons.
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Old 04-18-2013, 07:15 AM
 
Location: Beautiful place in Virginia
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Ok. Makes sense.

This is different from a third type of appraisal: a homeowner trying to determine how much their house is worth for selling? Or will the appraisers for that purpose be the same as the one for a mortgage?
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Old 04-18-2013, 08:32 AM
 
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Quote:
Originally Posted by titaniummd View Post
Ok. Makes sense.

This is different from a third type of appraisal: a homeowner trying to determine how much their house is worth for selling? Or will the appraisers for that purpose be the same as the one for a mortgage?
The same. Market value.
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Old 04-18-2013, 10:12 AM
 
Location: Beautiful place in Virginia
2,679 posts, read 11,732,478 times
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Thanks, y'all.
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