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When
you purchase your home, your lender requires a licensed appraiser to estimate
the market value of the property. After
the mortgage company receives a copy of the purchase contract,
they will order the appraisal. An
appraisal is a professional, non-biased opinion of the current value of your property and is
usually honored by most lenders for six to twelve months.
To
estimate the market value of your property, an appraiser researches the homes
that have sold in your subdivision and in your immediate market area (within 1
mile if possible). Only homes that have sold in the past six months and are
similar to your house with regard to livable area, age and amenities (i.e.
swimming pool, fireplace, etc.) can be considered.
The
appraiser will then prepare a written report and submit it to the mortgage
company for their review. If all is
well and the appraisal is acceptable to the mortgage company, they will then
approve your loan.
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The
Appraisal Process