MORTGAGE 101
What Is A Home Appraisal?
Welcome to Mortgage 101. We help home buyers and realtors understand home loans. You’re in the right place if you’re thinking of buying your first home, if you’re moving to your next home, or if you’re ready to refinance your existing loan.
What Is A Home Appraisal?
A home appraisal is a report that is drawn up by a licensed appraiser. The appraiser must be licensed in the state where the home is located.
An appraisal is an expert opinion of value of the property in question. The appraiser assess the particulars of the home and compares those details to other homes around it to determine the value of the home.
Why It Matters
The property must appraise for at least what you have agreed to pay for it. Or, make sure there is enough collateral in the home for the loan you want to get. This applies whether you are applying for a refinance or a home purchase.
The lender uses a appraisal to determine the amount of risk involved in the loan.
Why Do You Need An Appraisal
Sometimes an home appraisal is not required for a home loan. Each loan is different and has different requirements.
An appraisal protects the borrower so they’re not overpaying for a property. An appraisal protects the lender to ensure that the money they are lending is the equal to the value of the home.