What is an 'Appraised Value'

An appraised value is 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.

BREAKING DOWN '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. Qualified Appraiser

    An individual who has earned an appraisal designation from a ...
  2. Appraisal Approach

    A procedure for determining an asset's value. The appraisal approach ...
  3. Appraisal Management Company - ...

    An independent entity through which mortgage lenders order residential ...
  4. Appraisal

    A valuation of property (ie. real estate, a business, an antique) ...
  5. Appraisal Fraud

    A form of mortgage fraud, whereby the value of a home is deliberately ...
  6. Appraisal Capital

    A form of accounting adjustment. Appraisal capital is created ...
Related Articles
  1. Investing

    Find the Right Home Appraiser: A Quick Guide

    Locating the best home appraiser can mean a house valuation that's thousands of dollars higher than one that's done on the cheap.
  2. Investing

    What You Should Know About Home Appraisals

    Home appraisals are an unbiased way to determine a home's value. Here is what you need to know about obtaining one.
  3. Investing

    The Home Appraisal: Key To A Successful Refinance

    An appraisal is a professional’s assessment of a home’s value that ensures banks don’t lend more money than a property is worth.
  4. Investing

    How To Challenge A Low Home Appraisal

    If you're unhappy with your home appraisal, here are some steps you can take.
  5. Managing Wealth

    7 Ways To Increase Your Home's Appraisal Value

    When it's time to sell your home – or refinance it – it will need to be appraised. Here's how to make sure the valuation is as high as possible.
  6. Investing

    How Much Do Home Appraisers Make?

    Experience and training can create a high-paying career as a home appraiser, despite competitive pressures and a high level of government regulation.
  7. Investing

    What You Should Know About Home Appraisals

    The home appraisal is a key part of any loan-closing checklist. It’s an unbiased professional opinion of a home’s value.
  8. Retirement

    Your Heirloom Jewelry: How Much Is It Worth?

    You grandma's diamonds are now yours. Whether you plan to keep them or not, you first need an honest appraisal. Here's how to get one.
  9. Investing

    6 Tips For Protecting Your Home's Value

    New taxes, property values, appraisals, community changes and nearby abandoned foreclosures can all lower your home's value. Take proactive steps to protect it.
  10. Investing

    Is an Old Home Worth the Investment?

    America's old homes are beautiful but come with issues unique to older homes.
RELATED FAQS
  1. Do home appraisers use Zillow?

    When it comes to assessing a home for sale, licensed appraisers rely on detailed —and sometimes proprietary—information to ... Read Answer >>
  2. Why does the loan-to-value ratio matter?

    Learn how the loan-to-value (LTV) ratio is calculated, and why this metric is important to lenders when evaluating a home ... Read Answer >>
  3. What is the underwriter's job in a real estate transaction?

    Find out why the underwriter may be the most important person in your real estate transaction, and learn what information ... Read Answer >>
Hot Definitions
  1. Leverage Ratio

    Any ratio used to calculate the financial leverage of a company to get an idea of the company's methods of financing or to ...
  2. Two And Twenty

    A type of compensation structure that hedge fund managers typically employ in which part of compensation is performance based. ...
  3. Market Capitalization

    The total dollar market value of all of a company's outstanding shares. Market capitalization is calculated by multiplying ...
  4. Expense Ratio

    A measure of what it costs an investment company to operate a mutual fund. An expense ratio is determined through an annual ...
  5. Mezzanine Financing

    A hybrid of debt and equity financing that is typically used to finance the expansion of existing companies. Mezzanine financing ...
  6. Long Run

    A period of time in which all factors of production and costs are variable. In the long run, firms are able to adjust all ...
Trading Center