One of the most essential steps to go through when applying for a mortgage or refinancing your home, is a real estate appraisal. Lenders want to make sure the home’s market value matches the amount of money you wish to borrow; this is the necessity of the professional appraisal.
What Is a Real Estate Appraisal?
A real estate appraisal is an independent and objective opinion of your property’s value by a certified appraiser. A home appraisal, does not focus on the price you paid for your home, it does not focus on what you want the home to be worth, rather it’s an appraisal of what the property is worth in current market conditions.
Why Is An Appraisal Important For My Loan?
Lenders rely on appraisals to:
✅ Establish and confirm, the value of the property supports the loan amount.
✅ Protect the lender and buyer against overpaying.
✅ Provide an objective and competent value based on location, size, condition, and market trends.
A lender will not move forward with the funds without an appraisal being completed, since it is the home itself that serves as collateral for the mortgage loan.
How Appraisals Are Done
In an appraisal, a licensed, certified appraiser will:
– Visit the property (interior and exterior)
– Compare the property to recently sold comparable (known as “comps”)
– Take into account location, condition, upgrades and how desirable the property is.
– Write up an appraisal report estimating the fair market value of your home.
Why An Accurate Appraisal Is Beneficial
📌 Gives you a fair, objective value of your property.
📌 Helps you obtain the appropriate loan amount.
📌 Protects against paying too much for a property.
📌 Gives lenders (and buyers) confidence in the transaction.
Wrapping It Up
If you are buying, selling, or refinancing, a real estate appraisal is the accurate report you need for your loan. It gives you the security of knowing that your investment is secured, your loan amount is appropriate, and that everyone has clear instruction on the next steps.
Appraisals are not just for first time home buyers. They are for everyone to protect their financial future.
