Mortgage Appraisal

Mortgage Appraisals are home appraisals for the purpose of mortgage financing.  Lenders wish to establish a property’s value, which is determined by a wide array of criteria prior to funding a mortgage. 

Criteria such as style of home, age, location, size, construction and finishing quality, kitchen style, bathrooms, garages and size of lot are looked at.  In addition, current market conditions are considered and what other properties in the area have sold for or are selling for are looked at. 

When individuals apply for a mortgage, mortgage agents, mortgage brokers or mortgage specialists will ask questions that will provide additional information about the property.  In some cases, mortgage applications are completed on-line by individuals initially.

Individuals buying a home or condominium will include the purchase price of the property in the mortgage application.  In some cases, lenders will limit the mortgage amount to what the appraisal says the home is worth, if they feel the selling price was significantly higher than what the actual property should be valued at.  In cases when refinancing is requested, the mortgage value is based on assessments, comparable sales in the area, and any improvements made to the property since purchased. 

In cases involving commercial mortgages, more detailed professional mortgage appraisals or property appraisals are required. 

Bank and other lenders tend to work with a pre-selected group of approved home appraisers.  If an individual desires to purchase a home, or secure a mortgage, the home appraisal may come in below what a purchaser feels the property is worth.  In terms of values, banks and lenders tend to provide more conservative home appraisals, which in many cases is not a bad thing. 

Home appraisals or mortgage appraisals which are required are generally paid for by the borrower.  However, it is important to note that just as mortgage rates are negotiable, so are fees for mortgage or home appraisals.  The mortgage market is extremely competitive, and banks, lenders, mortgage agents and mortgage brokers want business. 

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April 27, 2017

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