Definition
A professional assessment of a property's market value conducted by a licensed appraiser. Mortgage lenders require an appraisal before approving a loan to ensure the property is worth the amount being financed. If the appraisal comes in low, the buyer may need to renegotiate, increase the down payment, or cancel the purchase.
Related Mortgage Terms
- Down Payment
The upfront portion of the home's purchase price paid in cash by the buyer. Conv...
- Loan-to-Value Ratio (LTV)
The ratio of the mortgage amount to the appraised property value, expressed as a...
- Underwriting
The process by which a lender evaluates a mortgage application to determine the ...
- Amortization
The process of paying off a mortgage through regular monthly payments of princip...
- Annual Percentage Rate (APR)
The total annual cost of a mortgage expressed as a percentage, including the int...
Understanding mortgage terminology helps you compare loan offers and make informed decisions. Use our mortgage calculator to see how these terms affect your monthly payment.