Generally, speaking it depends. Each mortgage company has different policies and procedures. On average due to consumer protection laws governing appraisals, most are not transferable. When a mortgage company orders an appraisal, they have to use an appraisal management company, an independent third-party that has a panel of licensed appraisers.
The AMC (for short), then selects an appraiser at random to fill the appraisal order for the mortgage company. A consumer seeking a mortgage cannot write a check directly to the appraiser nor can it paid in cash. Everything is done electronically during the appraisal order process from beginning to end. Each mortgage company uses a different appraisal management company for their appraisal orders. Many times, appraisers are not on multiple appraisal management company panels and as a result if an appraisal is done by one appraiser, another mortgage company unless that appraiser is also on that companies approved panel cannot do the appraisal. In other words, in order for an appraisal to be transferred from one mortgage company to another, the original mortgage company has to release the appraisal and then new mortgage company has to accept the appraisal.
Normally in situations like this, the original mortgage company almost always releases the original appraisal so another lender can use it and it is usually the other mortgage company’s policy that prevents an outside appraisal from being used in the consummation of the loan and a new appraisal is typically ordered.
What to do if you can’t decide which mortgage company based upon appraisal
Know this -every appraiser has the same set of criteria, the same set of data, same homes sold, same listings so it’s unlikely one appraiser at one mortgage company could give one value, and another appraiser at another mortgage company operating on the same data could give another value. Even if there is disparity between the two values, the loan underwriter has to sign off the valuation anyway, so boils down to who did a better quality appraisal. More consideration will be given to the appraiser who did a more thorough analysis.
This also prevents a practice known as “double apping” wherein a borrower looking to compare two separate mortgage companies tries to use the same appraisal and transfer it from one lender to another lender. This used to be permitted until the Home Valuation Code of Conduct came about which essentially penalizes a borrower for trying to do this even though they’re trying to get a fair and competitive market rate. (penalization being paying for a new appraisal)
Best practice; pick a lender who you feel is competitive in price, cost, responsiveness and knowledgeable about all of the many facets of letting in today’s environment, then order the appraisal and lock in a rate with that lender who you feel is going to have your best interests in mind.
We do release are appraisals for the benefit of the consumer for them to take to a different lender because we stand behind our loan programs, interest rate pricing and responsiveness in being able to successfully deliver in today’s credit environment. If you’d like to get a complementary mortgage rate quote, we can help so you can decide whether or not we are a fit.