10) Appraisals
Current Market Value
An appraisal of the property’s current market value is required by nearly ever lender before providing a mortgage. The bank will select their own independent appraiser (you do not get to choose your own).
A mortgage appraisal costs $400-$600 which you typically need to pay for but a few mortgage brokers will cover the expense for you. Appraisals should be ordered a minimum of 3 weeks before closing to allow for enough time.
Appraisal Requests for Developments by Truman Homes
Requests for an appraisal must be coordinated by emailing appraisals@trumanhomes.com.
Truman requires a minimum of 10 days notice to book an appraisal
Truman requires 72 hours to respond to any Appraisal requests
With Truman Homes, booking an appraisal on short notice is not possible so plan well in advance. I have had clients need to get closing extensions because it was not ordered early enough in advance. In this case I have no ability or power to get it done earlier because there are capacity, and health and safety considerations that must be balanced by Truman.
Appraisals Below Purchase Price
Banks will lend to a maximum of 80% of the value on a rental property and there is always a risk that your appraisal can come back below your purchase price. If this happens, you will be required to put down the difference as an extra down-payment.
Example:
Purchase Price: $400,000 (maximum mortgage @ 80% = $320k)
Appraisal: $380,000 (maximum mortgage @ 80% = $304k)
Difference = $16,000
Down-Payment Required
Original Total Down-Payment (20%) = $80,000
Extra Down-Payment = $16,000
Total Down-Payment = $96,000
