Yes, great guidance there.
But one cannot help but feel for the consumer who is potentially doing something very risky with potentially poor advisement.
Imagining myself as a mortgage banker, if an appraiser informed me a borrower was potentially making a loan as owner, when in fact the home was leased, I'd surely advise the borrower to adjust insurance at the very least. There may be a tough call there because an MB could lose the deal if they tell the borrower they must participate in the other loan program which requires more commitment or down, etc. Still, I can't imagine myself letting that borrower put themselves into a risky position like that, just to close a deal.
I'm still interested in learning more related to how the state of insurance effects the deal, closing, and at what levels insurance alteration is available, and at what level it may be tied to the loan.
I suppose it's a good idea to learn much more about insurance, so I can chat about the various insurance and risk difficulties related to occupancy. You know something like: "If you were to use this property as a rental in the future you surely would want to adjust your coverage." Also I would have some stories of other homeowners in worst case scenarios who did not do that, and how large their uninsured repair figures were.
Delta, thank you. Back to basics is where many complex scenarios lead to. Observe and report - full documentation. Fully transparent and disclosed chain of information keeps the appraiser covered. It's been a while since I've had to include report content about lender communications, but occasionally that may be necessary. Usually communication notes are about homeowner, Realtor, or notes about me informing the homeowner about preventative measures for home safety, that sort of stuff.
