If you’re looking for a trusted, experienced, and knowledgeable Regina mortgage broker to help a first-time home buyer, I am here to help. No matter what stage you are in the mortgage process, I can assist you in securing financing to get the home of your dreams. I also understand that all those mortgage rules and regulations surrounding the process can be confusing. My team and I are here to answer all your mortgage questions and take you to home ownership. In my latest blog post I explain why , If you’re buying, refinancing, or even renewing a mortgage, you may come across the term home appraisal. But do you really understand what exactly an appraisal is, and why it is sometimes required?
A home appraisal is an unbiased, professional opinion of a property’s current market value. It’s typically ordered by a lender to ensure the property is worth the amount you’re borrowing. In simple terms, it helps confirm that the home is priced appropriately and provides security for the lender — and in many cases, peace of mind for you as the buyer.
Here’s what you need to know about when and why appraisals are needed:
When Are Appraisals Required?
Appraisals aren’t always required, but they are commonly requested in the following situations:
- Location: If the property is unique or in a rural area a lender, the lender or default insurer may want to verify that the purchase price reflects the actual market value.
- Mortgage Refinance: If you’re refinancing to access equity or secure a better rate, your lender may require a current appraisal to determine how much they’re willing to lend.
- Switching Lenders or Renewing: In some cases, particularly if switching to a new lender, an appraisal might be needed as part of the due diligence process.
- Private Sales: If you’re buying a home directly from the seller without a real estate agent, a lender may ask for an appraisal to ensure the price hasn’t been inflated.
- Condition: If there are questions about the condition of the property, a lender may ask for an appraisal to ensure the property is in readily marketable condition. This is common in the purchase of properties in foreclosure.
How Is an Appraisal Done?
An appraisal is carried out by a licensed appraiser who physically visits the home and evaluates factors such as:
- Square footage and layout
- Overall condition of the property
- Recent renovations or upgrades
- Comparable recent sales in the neighbourhood
- Local market conditions
The appraiser then provides a detailed report with a value based on their findings. Lenders use this report to determine if the property supports the mortgage amount requested.
What Happens If the Appraised Value Is Lower Than the Purchase Price?
If the appraisal comes in lower than your accepted offer, the lender will only finance up to the appraised value. That means you’ll need to either renegotiate the price, increase your down payment to cover the shortfall, or walk away from the deal if your conditions allow.
Do You Pay for the Appraisal?
In most cases, YES, the appraisal fees typically range from $300 to $500 depending on the location and property type. Your lender or mortgage broker will arrange the appraisal, and the cost is usually due upfront or added to your closing costs. If you are completing a mortgage default-insured purchase, the insurer will pay for and complete the appraisal.
Do You Get a Copy of the Appraisal?
No. While you are required to pay for the appraisal as part of the qualifying process, the appraiser’s client is the lender and therefore the report legally belongs to the lender and the appraiser is legally required to protect the confidentiality of their client. While you may not be able to obtain a copy of the appraisal, we can discuss the report with you to help you understand how the valuation was determined.
Why Work with a Mortgage Broker?
A mortgage broker can help you navigate the appraisal process, explain the implications, and find lenders who are flexible and understanding if there are any hiccups. I work closely with clients and appraisers to help streamline the process and keep things on track, especially in tight timelines or competitive markets.
Have questions about appraisals or the mortgage process? Reach — I’m here to help every step of the way.
PLEASE NOTE:
Mortgage rules and lender policies change all the time. Because Ryan has access to many lenders and have specialized expertise in structuring mortgage applications, he can determine the optimal way to structure your application to maximize the utilization of things like employment income, self employment income, Canada Child Benefit income, disability income, maternity leave, down payment sources, credit issues, debt ratios , etc. Choice in lenders, combined with his experience, can make the difference in qualifying and/or qualifying for the amount you want. It’s not just about the best rate, it’s about flexibility and choices.
