Real Estate Mortgage Loans
Real Estate Home Appraisals
In order to obtain a mortgage loan, we must establish the current market value of the property you wish to mortgage. This value is determined by a professional real estate appraiser. The value of the property is an important piece of the decision process used by us to approve or deny your mortgage application.
The appraisal sets the collateral value of the property which in turn determines the maximum mortgage amount. We are required by regulation to obtain an appraisal.
An appraiser is a professional who has received training in estimating property values. Their appraisal is an estimate of the fair market value of the home and contains comments about the physical condition of the property. Strict guidelines and a standardized costing method govern the appraiser's work. Most states require that an appraiser be certified or licensed.
An appraiser uses two sources to determine the fair market value of the property. Using an established method, the appraiser compares the property to comparable properties in the area which have been listed for sale or actually sold recently. The second source is to evaluate the surrounding neighborhood and predict how it will affect the future value of the property. This second evaluation includes the following details.
The physical condition of the property, its age, structural soundness, and landscaping.
The location of the surrounding homes, type of neighborhood, access to public transportation, and any commercial development in the area.
The local government's zoning regulations and assessment value for property tax purposes.
The appraiser examines the data accumulated and determines a fair market value. An appraisal report is prepared and sent to us.
The appraisal fee is paid by the property buyer as part of the closing costs. Although fees vary, an appraisal may cost from $100 to $400. We make the arrangements for an appraisal and thus control the fee.