As housing prices continue to increase while interest rates remain steady, the great era of mortgage refinancing continues. More and more homeowners are seeking to lower their interest rates, lower their monthly payments, and/or pull equity out from their increasingly valuable home.
This can’t last forever, of course, as we recently pointed out. Yet, so long as it does, lending institutions will be up to their eyeballs in refinance applications. Mind you, this is a good problem to have–lending institutions are in the business of making loans, and a steady stream of applicants is good for business.
Yet, as these applications build, they put strain on the resources these institutions use to evaluate applications. This includes appraisers, who lending institutions rely upon to accurately determine the value of the property under refinance.
And that’s where TrendSource’s Property Condition Inspections come in.
TrendSource Property Condition Inspections assist lending institutions and their appraisers in evaluating a property under consideration for refinance. This assistance can be surface level–including including exterior photographs as in a Drive By Inspection–or can go much, much deeper as with a Scope E Inspection, which includes meticulous sketches of interior floor plans and measurements.
Such Inspections take some of the burden off appraisers, who do not need to busy themselves with this surface level documentation. They can perform more high level analyses and help evaluate more loans with this freedom. Essentially, Property Condition Inspections allow lending institutions to offload much of the documentation required to evaluate a loan.
In-depth Property Condition Inspections, like Scope E, are particularly useful when a lending institution is evaluating a commercial property that has undergone significant additions since its original loan.
Additions to property stand to change its value and thus shape the terms of refinance. Yet not all additions, particularly with commercial properties, are of equal value: additions to common space, which is not rentable and thus not monetized, are nowhere near as valuable as additions to rentable space, which stand to generate revenue.
In such cases, a Property Condition Inspection will help lending institutions and their appraisers determine the new value of the property by delineating through sketches and measurements exactly what portion of the property is rentable and what portion is not.
TrendSource is a pioneer of Property Condition Inspections, executing them on behalf of lending institutions across the country. Our Inspectors understand the complexities of such Inspections and that accuracy is paramount. And our Quality Assurance team, truly the best in the business, further ensures the accuracy of these reports.
Lending institutions are experiencing one of those good kinds of problems–so many applications, so little time. Property Condition Inspections help banks more efficiently move through these applications by outsourcing a portion of an appraiser’s evaluation. In the current refinance deluge, they need all the help they can get.