Why Is the Lender Asking For An Appraisal As A Condition For My Mortgage Approval?
Sometimes a mortgage agent runs across a situation where the client is questioning why the lender has imposed a certain condition ie property appraisal. The client may say that their neighbor or relative or friend just got a mortgage and they did not have to pay for an appraisal on the property.
If a client qualifies, some lenders will use what is called an APV or Automated Property Valuation. This saves the cost of an appraisal along with moving the mortgage application approval process along much faster.
However, some types of applications and properties will continue to require a full appraisal, such as but not limited to:
- properties with values greater than $750,000
- mortgage amounts greater than $600,000
- construction draw financing (progress advance)
- rental properties
- all New Immigrant and BFS (Business For Self) applications
- restricted properties
- recreational properties
- unique properties including Leasehold Tenure
- the property has more than 1 unit (multiple units)
- leasehold mortgages
- conventional Mobile, Modular or Floating Homes on owned or leased land
- purchases with no MLS
- private sales
- power of sale
- rural / non-urban properties where the 2nd digit of the postal code is ‘0’ (e.g. P0P)
For many reasons an appraisal may be required as a condition to approving your mortgage application.