What is an Appraisal?

Just as the lender doesn’t want to lend you more money than the house is worth, you don’t want to overpay for your new house.

As part of your mortgage loan application, you’ll pay for your lender to order an appraisal on the house that you are buying. Appraisals typically run between $200 and $400. Lenders won’t approve and fund your loan until they establish that the home you are buying is worth the loan amount you are requesting.

An appraisal is an objective, third-party estimate of the current market value of a home, made by a person who has sufficient knowledge and experience to accurately estimate its value. Appraisers use comparable sales and listing data, as well as information about the home being appraised, its neighborhood, community, region and the local and national economy to support their value estimates.

Once the appraisal is complete, be sure to ask your lender for a copy of it. By law you are entitled to a copy of the appraisal.

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