Appraisal

An appraisal is a report written by an accredited appraiser to confirm the current market value of a home. Most often an appraisal is utilized when a client is refinancing their home, also known as taking out equity. A lender will want confirmation of a homes current market value to make sure they are not lending out more money than the home is worth. When refinancing, the maximum loan to value is 80% of the home's current market value. Another insistence for needing an appraisal would be a transaction transpiring from a private sale. Again, lenders want proof the sale price is a reasonable price for the home.

Most often the client is responsible for paying for the appraisal and when done, the appraisal is sent to the client's mortgage broker or bank. An appraisal is usually considered usable if it was completed in the last 3 months. Appraisals expire due to the ever-changing nature of the housing market.