An appraisal is a professional opinion on how the property is worth. During a mortgage application, the lender or the lender’s representative, such as a loan officer, typically orders the appraisal. The lender will then provide the appraiser with the necessary information about the property and the borrower’s loan application. The appraiser will then visit the property, inspect it, and gather information about the property and the surrounding area.
After the inspection, the appraiser will prepare a report that includes an estimated value of the property, which will be used by the lender to determine the loan-to-value ratio and to assess the borrower’s ability to repay the loan. The lender will then use the report to make a decision about whether to approve the loan.
This is a supplementary post to: First-Time Homebuyer’s Guide to Mortgage Approval