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October 19, 2012

The Loan Process Part 3: Appraisal

by Molly Schiff
Life Guard Stand

This article is part 3 of 4 discussing the loan process in our new Mortgage Basics series. See below for all four parts. 

While your loan is being reviewed by the underwriter, the home appraisal is ordered. This report is done by the home appraiser, who will do an interior and exterior inspection of the subject property to determine the value of the home to make sure it is adequate collateral for the loan.

If the appraisal is completed before underwriting is done, it will be included with the final loan application that gets submitted to the bank. If the appraisal is not complete before underwriting is finished, the appraisal will be added as a “condition” or missing document for the loan.

The appraisal process has changed drastically since May 1 2009, when Fannie Mae and Freddie Mac adopted the Home Valuation Code of Conduct (HVCC), which they created jointly with the Federal Housing Finance Agency and the New York State Attorney General.  The HVCC attempted to address some of the dishonest practices that cropped up in the run up to the housing collapse, but unfortunately the changes have hurt borrowers in other ways and made the lending process less efficient. Read more about the trouble with the new appraisal process, as well as difficulties homeowners can expect to encounter, HERE.


Central Coast Lending is a California mortgage brokerage based in San Luis Obispo County. With offices in San Luis Obispo, Morro Bay, Paso Robles, and Arroyo Grande, Central Coast Lending is the top source for Central Coast mortgage, real estate, and home loan needs. To see why using a broker offers lower rates and superior service, click HERE. For a free, hassle-free online pre-qualification click HERE or call 805.543.LOAN to talk to one of our expert loan officers.

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