One of the most common purposes for an appraisal is to finance a mortgage.
Mortgage appraisals are usually requested when an applicant is applying for a mortgage loan.
When purchasing or re-financing real estate property, the applicant must take out a loan from the bank. In the process of taking out a loan, the bank must obtain an appraisal report on the property in order to approve a loan for the applicant. Real estate appraisers provide an unbiased and objective professional opinion of the value of the property in question. With experience, expertise, and professional judgement the appraisers ensure that their valuation is as accurate as possible. The appraisal report is then used to determine the market value of the property which subsequently serves as the bank’s basis for an approved loan amount for the applicant.
The appraised value of the property is used not only by the applicant, but also by the mortgage broker when finding the ideal lender, and the lender itself when considering the mortgage agreement.