Explore the Mortgage101 Library
Check Local Mortgage Rates
Loan Program Choices
Use our calculator to find out your estimated monthly payment in advance: Enter the loan amount, interest rate, and length of mortgage.
Try our Mortgage Payment Calculator
An appraisal is an opinion of value or the act or process of estimating value. This opinion or estimate is derived by using three common approaches, all derived from the market.
- The cost approach to determining value is to estimate what it would cost to replace or reproduce the improvements as of the date of the appraisal, less the physical deterioration, the functional obsolescence and the economic obsolescence. The remainder is added to the land value.
- The comparison approach to determining value makes use of other benchmark properties of similar size quality and location that have been recently sold. A comparison is made to the subject property.
- The income approach to determining value is of primary importance in ascertaining the value of income producing properties and has little weight in residential properties. This approach provides an objective estimate of what a prudent investor would pay based upon the net income the property produces.
Then after thorough analysis of all general and specific data gathered from the market a final estimate or opinion of value is correlated.
- Alternatives to Getting a 2nd Mortgage
- Appraisal Basics
- FHA Loans for a First-Time Home Buyer
- Should You Refinance? Make Sure the Timing is Right
- 3 Reasons Banks Reject Short Sales
- Second Mortgages: Advantages and Disadvantages
- Short Selling a Rental Property
- Home Equity Loans for People with Bad Credit
- 3 Factors that Can Negatively Affect Your Mortgage Application