Appraised value

SmallBusiness.com: The free small business resource

Overview

Appraised value pertains to the assessed value of real property in the opinion of a qualified appraiser or valuer. It is often used as a pre-qualification and risk-based pricing factor related to the distribution of mortgages by a financial institution.

When obtaining a mortgage, the funding lender relies on the standardized valuation methods of an appraiser to asses a given value of realestate on which a loan will be secured (e.g. a residence). The lender will then justify the loan amount (and other risk-based pricing) factors as a percentage of the appraised value of the property. A low appraised value will affect a buyer's ability to purchase a property. This is because the loan amount would seem too high with respect to the value. Unless the buyer can come up with the difference, the buyer will unlikely be able to qualify for the loan.

Appraised value can also be made after a property sale. For example, home owners wishing to gain access to their increased equity in their home may obtain a mortgage valuation to prove its value has risen and thus justify increasing the amount of their mortgage.

See Also

This term or phrase is currently an entry in The SmallBusiness.com Open Glossary. Please help expand this entry into a more detailed description.

This is a SmallBusiness.com stub: This page has been started by a user, but it needs more information and formatting to be considered an entry. If you can help, please add information that will make this entry helpful. See: How to edit an entry.

Source

This entry includes content from the following Wikipedia article: Wikipedia Appraised value