Better Mortgage’s New Appraisal Process Promotes Equality in Mortgage Lending

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In today’s hot real estate markethome buyers need all the help they can get to maximize the chances of their offer being accepted.

Unfortunately, some buyers are held back by the need to make their offers dependent on home valuation, which shows that the home they are buying is worth the price they are offering for it. You see, home buyers often have to include contingency assessments in their proposals. Otherwise, they risk not getting mortgage approval if the house the estimate is too low

It is better there is a solution to this problem. Improving mortgages has long been the goal of revolutionizing the way people buy homes. This is done with:

  • Fully digital application process
  • Free promise
  • Efforts to harness the power of technology to expedite loan processing

Now the online lender is deploying Evaluation guarantee for clients who work with real estate agent Better to buy a home. The guarantee ensures that the appraisal is no longer an obstacle to obtaining a home loan. Now buyers do not have to worry about their purchase being canceled due to too low a rating.

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This is how the Better Appraisal Guarantee works

The traditionally low score made it difficult to buy a home. This is because it affects the loan-to-value ratio or property value in relation to the loan amount.

Think of it this way: The lender limits the amount you can borrow to 90% of the appraised value of the home. You are offering $ 200,000 for a house, but an estimate shows that the house is only worth $ 175,000. This means that the maximum mortgage you are eligible for is $ 157,500 and you have to pay the rest.

Better change the rules

Better employs over 14,000 in-house and partner real estate agents. For home buyers who do business with one of them, Better makes sure that he finances them mortgage at a bargain price agreed between the buyer and the seller. Better provide this mortgage loan with financing even if the final appraised value of the home is found to be lower than anticipated. And the loan will be funded on the terms that Better’s nonprofit loan advisor advised the buyer in advance.

This allows borrowers to make an offer to buy a home without the contingency of an appraisal, because they don’t have to worry about not being able to get financing if the home’s appraisal is lower than expected.

“In this recent hot market, we saw that up to 20% of the valuations did not match the market clearing price agreed between buyers and sellers, so we created the product to give more confidence. This is no longer just a “digital mortgage”. “It’s about leveraging our scale and digital advantage to create real, tangible innovation, such as guaranteeing the best value,” said Emanuel Santa Donato, vice president of Capital Markets and Lead Development at Better.

Make your home purchase more inclusive

Better hopes their new Valuation Guarantee will make buying a home not only easier, but also more affordable and open to all buyers – especially as about 1 in 5 successful offers in recent months have abandoned valuation contingencies.

Without the Better Appraisal Guarantee, better-off Americans have an edge. They may not have to worry about securing funding if they pay in cash. Or, they may simply bring in more money for the deal if the home is undervalued. Better’s new guarantee guarantees everyone The qualified buyer has the opportunity to make an offer without the contingencies associated with pricing – not only those who can afford it.

Appraisal requirements have historically served to perpetuate housing discrimination, as people of color sometimes faced a lower appraisal of their property. Addressing fears that a home will be priced too low, Better is trying to eliminate this systemic racism inherent in the housing market.

“This is another time Better has taken the initiative to improve home ownership accessibility. Inoperable assessment policies and practices are of limited diversity and create friction for young people, minorities, LGBTQ communities and others to move easily to areas where they can afford it, “said Gillian White, head of procurement at Better. “I myself took family photographs and other identifying objects when I sold my home, knowing that my personality could play a role in the assessment process. This is not the American dream for which we have all worked so hard. “

With Better’s Valuation Guarantee, appraisers will no longer serve as gatekeepers of home ownership. Instead, borrowers will work with their agent to agree on a purchase price and can fix their loan terms and appraisal value in just 15 minutes.

They will be able to make the equivalent of an offer in cash, which could result in an offer acceptance rate of up to 50%. This could be a game changer for many borrowers who are trying to compete in one of the hottest housing markets in recent years.

As White said, “Our team at Better has been working on the first truly digital home ownership platform for five years, and today that dream has become a reality with the launch of the Better Appraisal Guarantee.”

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