Limited housing inventory can lead to buyer submitting offers that exceed the appraised value of the home, resulting in an appraisal gap. In these cases, the buyer may be responsible to cover a portion or all of this gap. Ameris can help your buyers in a hot seller’s market with these appraisal strategies and solutions.
1. PROPERTY INSPECTION WAIVER
For buyers using conventional financing with at least 10 percent down, the home may qualify for a Property Inspection Waiver (PIW). By allowing the mortgage banker to check the property for PIW availability prior to making an offer, the borrower can save time and money, and strengthen their offer by waiving the appraisal in their offer. In situations where a PIW is not available, borrowers may be able to pay a rush appraisal fee to reduce the appraisal contingency time.
2. Use Upfront Mortgage Insurance (UMI) to Cover an Appraisal Gap
Appraisal gaps can cause increases to LTV that may cross the 80% threshold requiring your buyer to now purchase monthly mortgage insurance. Ameris offers Upfront Mortgage Insurance (UMI) to help keep your buyer’s payment low and even maintain the same financed loan amount. UMI allows the buyer to eliminate monthly mortgage insurance in exchange for purchasing it upfront in one lump sum. By purchasing the mortgage insurance upfront, it is significantly less than the amount paid monthly over time. Another advantage is that UMI can be paid by the borrower, seller, or lender.