How Do You Understand Mortgage Underwriter Comps?
Underwriting is the process by which a mortgage loan is reviewed and accepted as a solid risk. One major part of the underwriting process is property valuation. Underwriters usually look at an appraisal–conducted by an independent appraiser–to make sure the property value supports the loan and is an accurate value. To do this, they must review comparable properties on the appraisal report. Learn what an appraisal contains. When preparing their reports, appraisers look at the square footage, number of rooms, number of bathrooms, any recent improvements, soundness of utilities such as heat and water, and the general aesthetic condition of a home. Understand how appraisers pick comps. “Comps” is short for comparables. To get an accurate market value, appraisers must compare the property in question to similar properties that have sold recently in the same area–if possible, the same neighborhood. Learn to read an appraisal. When looking to see if the comps are fair, you must review the
