The simple answer is that the appraisal does not transfer.
When an appraisal is completed for an FHA loan, the appraiser is working with and being paid by the lender. As such, the lender holds onto the appraisal report and any other related documents. It is not possible for those documents to be sent over to a different lender unless the original lender releases them.
In some instances, it may be possible to get a new lender to accept an earlier appraisal if it was done recently. For example, if the appraisal is less than six months old, a new lender may accept it. However, this isn’t always possible, and some lenders may not accept an appraisal from another lender even if it is less than six months old.
There are a couple of benefits to having a new appraisal once the borrower switches lenders. First, there is the chance that the value of the property has increased since the last appraisal, meaning that the new loan may have a higher ceiling. Additionally, a new appraisal may pick up any issues with the property that went unnoticed in the original inspection. This makes sure that the property is safe and sound for lending purposes.
It is important to note that there are cases where the borrower does not need to get a new appraisal when switching lenders. FHA streamlined refinance programs do not require a full appraisal, which means that if the borrower meets the eligibility criteria, a full appraisal won’t be necessary. This is a great way to save time and money if the borrower already has an existing appraisal for the property.
In summary, it is usually necessary to get a new appraisal when switching lenders, but exceptions exist. If the previous appraisal was done within the past six months, it is possible that a new lender will accept it. However, for most cases, the borrower will need to go through the whole process again and have a new appraisal completed. Additionally, FHA streamlined refinance programs don't require a full appraisal, so if the borrower is eligible, they can save time and money.
This article was contributed on Sep 22, 2023
