10) Appraisals
Current Market Value
An appraisal of the property’s current market value is required by nearly ever lender before providing a mortgage.
A mortgage appraisal costs $400-$600 and some mortgage brokers will cover the expense for you but you often are required to pay for this. Appraisals should be ordered a minimum of 3 weeks before closing to allow for enough time.
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
Appraisal Requests for Developments by Truman Homes
Requests for an appraisal must be coordinated by emailing appraisals@trumanhomes.com.
