What is the role of valuations within the lifecycle of a mortgage?

  • Valuations play a significant role in the lending process by assisting mortgage lending financial institutions throughout different stages within the lifecycle of a mortgage. AVMs are commonly used by some lenders where the loan to value ratio is not high and to support most home equity loans (e.g. line of credit or second mortgage based on existing property owner home equity) and during the preapproval stage, valuations determine the viability of the mortgage application at the time the loan is processed
  • At mortgage origination, AVMs can be used by mortgage brokers to understand the value of a home and can be used to optimize the LTV of a customer’s loan
  • During the collateral adjudication stage, valuations and integrated fraud checks help to assess collateral risk related to the mortgage
  • Post funding, lenders use valuations to provide an ongoing value assessment of their overall lending portfolio (book)
  • During the course of servicing a loan, valuations help a lender to determine the client’s available equity and potential for other home-equity products
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