By appraised value, it means the evaluation of the value of any property, on the basis of any specific time period. This evaluation is done by an appraiser at the time of the origination of any mortgage for the property. The appraiser is mostly selected by the lender, although the costs are covered by the borrower.
The appraised value means the analysis and evaluation of the value of any property for a specific time period. This is done by appraisers selected by lenders and it is done before the final sanctioning of mortgages. The borrower has to pay the cost of the appraisal or valuation procedure. The appraised value may or may not be similar to the market value of the property in question. The value determines the underwriting procedure for loans, while influencing the eligible loan amount, and its terms and conditions. The LTV (loan-to-value) ratio is based on this value in most cases.
As can be seen, appraised value has a big part to play in the sphere of home loans. This is the value worked out by appraisers appointed by banks and financial institutions before sanctioning home loans. This also determines the LTV and other terms and conditions. It also influences the maximum amount that the borrower can apply for. However, the only thing to remember here is that the appraised value may not always correspond with the property’s actual market value. This is one watch-out for borrowers. Owners/developers of property may enhance appraised value by making improvements, installing new features, getting more energy-efficient and environment-friendly features, and integrate new-age technologies into the living experience. They can take steps to enhance the overall living experience at the property.
