Evaluating Your Portfolio in an Uncertain Market – An eBook for Lenders of All Sizes
At What Point in the Mortgage Underwriting Process Should You Run an AVM?
Many mortgage brokers know that an automated valuation model (AVM) is an important part of the mortgage underwriting process — but when is the best time to run one?
The answer in most cases is at the application stage.
The application stage is the best time to run your AVM for several reasons.
- Your lender and other partners are not involved yet.
After the application has been approved, typically a lender is brought in. In some deals, the mortgage might even have been insured, or money was spent on a full property appraisal. If a problem or discrepancy in value is caught at this stage, it is much more inconvenient than spotting it early.
For this reason, it is best to run an AVM before any other partners are involved to save both them, your client, and you time and money.
- You can spot other issues, like an undisclosed mortgage or other people on title.
While a discrepancy in value is sometimes caught sooner in the process even without an AVM, other hidden issues can be harder to find. For instance, an undisclosed mortgage or other people – like a spouse or parent – on title may not be revealed until the deal is about to close, which can present major issues. An AVM could help you know all of this information, and more, at the application stage.
- It creates a smoother process overall.
Even when a deal can close after finding a discrepancy or issue, it can still be disruptive to your relationships. Lenders and other partners grow tired when working with agents and brokers who always have deals where information changes on closing.
Knowing more upfront will help you prepare for the entire process, which will lead to faster, more efficient closings for all involved.
Like a credit report can help you validate information about a borrower, an AVM will help you validate information about a property and its owner.
Doing this is critical and something many lenders now use in their own processes. Sometimes, a broker might submit a deal where the lender disagrees with the value and it has not even been sent out for an appraisal — this could be because the lender has already run an AVM.
More due diligence also leads to better service for your clients because often these issues or omissions are not intentional.
Purview’s AVM tools are accurate, up-to-date, and easy to access. Plus, the data is available for both mortgage brokers and lenders, leaving to even stronger alignment.
Learn about our property valuation tools today. Call 1-855-787-8439 or visit www.purview.ca.
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