Is it necessary to specify HELOC as the assignment type?

[Tom4value]

Yes.
Frankly, I don't fully grasp the different home equity loan types. What is a first vs second mortgage, refinance vs non-refinance... And mostly how such details impact potential risk for the appraiser.

You are overthinking this as to your role. FYI:
The difference between a 1st and 2nd mortgage is the lien position. If they foreclose, the 1st loan gets paid 1st. If there is money left over, the 2nd lien holder gets paid. HELOCs can be in the 1st lien position if that is the only lien. If there is another mortgage, the HELOC is always in 2nd.

A refinance is when the owner gets new or additional financing on a property they already own. This could also be if a owner is buying out another owner, as in a divorce or an estate.

Now for your main question….the purpose of the assignment does not increase or decrease your risk! You are to provide an opinion of market value. That is your only job….aside, of course, stating the intended users, clients and intended purpose of the appraisal.

 

[sputnam]

Yes.
Frankly, I don't fully grasp the different home equity loan types. What is a first vs second mortgage, refinance vs non-refinance... And mostly how such details impact potential risk for the appraiser.

If the appraisal assignment is to report market value, the type of loan the borrower is seeking is not relevant to the opinion of value. It's a reporting issue only. One that is required by regulation.

 

[Mark K]

First mortgage is the first mortgage recorded on the property.
Second mortgage is the second " ". Nothing more, nothing less. It simply means that the second mtg. is in secondary position to the first mtg. and the second mtg. holder may stand to lose a lot more since the first mtg. is paid off in full first in the event of default. Its always better to be in first position re; mtg.

HELOC is not a refinance. Its simply a line of credit backed by a mortgage on the subject property. If the house is paid off (no mortgage), the HELOC is in first place. That's why, when you finance/refinance with a typical mortgage, the lender will require a HELOC to either subordinate their position or they require it to be paid off and released so the primary mortgage can be in first place.

If there's a mortgage in place on the property, the HELOC is essentially a second mortgage. My house has been paid off for 25 years. I got a short term HELOC about 15 yrs ago; its was essentially a first mortgage because there was no other mtg. on the house.

Does any of this have any effect on an appraisal/appraiser? NO! If your form insists, put 'other' and explain.

 

[ZZGAMAZZ]

If you apply for a mortgage loan it is either to be a party to purchase a property or be a party to refinance a property.
You can structure loans many different ways.
The terms are different for the different structures.
A line of credit is just one of those structures.

I recently encountered something like a "jumbo reverse mortgage" (or something similar) that apparently requires a FHA-level inspection and HUD compliance statement although the loan is conventional. Confused me a lot.