What is an Appraisal- and Why is it Important?
Updated: Jun 18, 2021
TO APPRAISE OR NOT TO APPRAISE- That is the question.
When purchasing a house, part of the financing process is to have the home appraised. This is when a licensed appraiser provides a value for the property based on comparable properties. They are looking features such as location, style, size, and condition. Your lender may require an appraisal in order to lend you money. You can only obtain financing on the appraised amount. Meaning, if you purchase a house for $450,000 and it only appraises for $425,000 you can only borrow up to $425,000.
So what happens if the property OVER appraises? Good for you! You have some instant equity.