Appraised Value

AAA

DEFINITION of 'Appraised Value'

An evaluation of a property's value based on a given point in time that is performed by a professional appraiser during the mortgage origination process. The appraiser is usually chosen by the lender, but the appraisal is paid for by the borrower.

INVESTOPEDIA EXPLAINS 'Appraised Value'

The appraised value of a home is an important factor in the loan underwriting process and plays a role in determining how much money may be borrowed and under what terms. For example, the loan to value (LTV) ratio is based on the appraised value.

In general, if the LTV is greater than 80%, the lender will require the borrower to buy private mortgage insurance. However, if the LTV drops to 78% upon a new appraisal, private mortgage insurance payments may be eliminated.

RELATED TERMS
  1. Sales Comparison Approach - SCA

    A real estate appraisal method that compares a piece of property ...
  2. Closing Costs

    The expenses, over and above the price of the property that buyers ...
  3. Mortgage Originator

    An institution or individual that works with a borrower to complete ...
  4. Appraisal

    A valuation of property (ie. real estate, a business, an antique) ...
  5. Loan-To-Value Ratio - LTV Ratio

    A lending risk assessment ratio that financial institutions and ...
  6. Purchasing Managers Index - PMI

    An indicator of the economic health of the manufacturing sector. ...
Related Articles
  1. Home & Auto

    How can I tell when a real estate agent might be lying to me?

    Find out what real estate agents are likely to lie about, the reasons for the lies and how to protect yourself from unscrupulous real estate agents.
  2. Credit & Loans

    4 Steps To Attaining A Mortgage

    It starts with knowing your choices as well as your price range. We show you how to get there.
  3. Personal Finance

    Understanding Your Mortgage

    We walk through the steps needed to secure the best loan to finance the purchase of your home.
  4. Credit & Loans

    Understanding The Mortgage Payment Structure

    We explain the calculation and payment process as well as the amortization schedule of home loans.
  5. Insurance

    10 Reasons Why Moving Might Not Make You Richer

    Find out why moving to a less expensive city may not reduce your expenses.
  6. Insurance

    Who are the best-rated home insurance companies in the US?

    Learn about the top rated home insurance companies in the United States based on customer satisfaction surveys. See how customers rank the top insurers.
  7. Home & Auto

    Universal Design Improvements That Increase Your Home's Value

    Universal design improvements yield great returns for homeowners, either through increased future comfort, or broader market appeal for their home.
  8. Home & Auto

    8 Common Refinance Mistakes

    As mortgage rates creep higher, there's still time to dump your mortgage rate for a lower one. But don't ruin your chance at a refinance by making mistakes
  9. Home & Auto

    10 Questions You Forget to Ask When Buying a House

    If you are thinking about buying a home, you are not alone. According to the New York Times, more Americans are getting home-buying fever.
  10. Home & Auto

    How To Refinance If Your Home Appraisal Is Too Low

    When you take out a mortgage on a home or refinance an existing mortgage, most lenders want a loan-to-value ratio (LTV) of 80 percent or lower.

You May Also Like

Hot Definitions
  1. Commodity

    1. A basic good used in commerce that is interchangeable with other commodities of the same type. Commodities are most often ...
  2. Deferred Revenue

    Advance payments or unearned revenue, recorded on the recipient's balance sheet as a liability, until the services have been ...
  3. Multinational Corporation - MNC

    A corporation that has its facilities and other assets in at least one country other than its home country. Such companies ...
  4. SWOT Analysis

    A tool that identifies the strengths, weaknesses, opportunities and threats of an organization. Specifically, SWOT is a basic, ...
  5. Simple Interest

    A quick method of calculating the interest charge on a loan. Simple interest is determined by multiplying the interest rate ...
  6. Special Administrative Region - SAR

    Unique geographical areas with a high degree of autonomy set up by the People's Republic of China. The Special Administrative ...
Trading Center