Ordering an unbiased, objective appraisal on a home is a way for lenders to determine whether the amount of money requested in your mortgage application is appropriate, compared to the property’s market value. This is important in case the worst happens, and you default on the mortgage. If the lender approved a loan balance for more that what the house was worth, they will likely incur a loss.
Understanding the market value of the home you’re planning to buy will help you in making a decision. If the appraisal comes back higher than he purchase price, perfect. You just gained some home equity.
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