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Liberty Mortgage, Inc.
509 W. McKinley Avenue
Mishawaka, Indiana 46545
Telephone 257-0629
or 888-568-1786
Fax 574-257-0632
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The appraisal of the property being purchased is one of the most misunderstood facets of the buying
process. Typical questions asked about the appraisal process are answered for you below.
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What is an Appraisal and Why Do I Need One?
Before the lender will make a loan on a property,
an estimate of value is required. It is common for lenders to require that appraisals conform to the
Uniform Standards of Professional Appraisal Practice. This is done so that consistent, detailed information
is provided on all appraisals providing for protection for both the bank's and the buyer's investments.
The appraisal provides an estimate of the value of the property. The information in the appraisal is
necessary to evaluate whether or not the property is adequate security for the loan. An appraisal is
a report made by a qualified person setting forth an opinion or estimate of value. An independent appraiser
inspects the property, neighborhood and at least three other properties of comparable size and style.
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Who is the Appraiser?
Appraisers are licensed by the state in which they work. These individuals
undergo an extensive 2-year on-the-job apprenticeship with an experienced appraiser. The final opinion
of value is based primarily on the experience and logic of the particular appraiser who completes the
report.
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What does it cost?
The fee for a standard.residential appraisal in this area is generally
in the $275-$325 range. Appraisals that are more complex such as for government loans, investment properties
and unusal properties may be higher. Occasionally, shorter form appraisals may be used when a loan is
computer underwritten, lowering the charge from a full appraisal.
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Can I Get a Copy of the Appraisal?
You are entitled to a copy of the appraisal (after all,
you paid for it!). We routinely provide a copy of the appraisal to our borrowers. Should you happen not
to get a copy at or before closing, just ask us for one.
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When Will It Be Done?
Immediately after loan application, we will order an appraisal of your
property. It will generally be completed within seven to ten days. The appraisal is submitted with the
loan package for review by the underwriter.
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How if value determined?
An appraisal is simply a supported estimate of value. There are three
approaches to estimating market value of a property: the Cost Approach, the Income Approach and the Sales
Comparison Approach (a.k.a. Market Data Approach). The cost approach measures the value of a house from
what it would cost to reproduce it. The income approach relies on the analysis of income generated by
the property to determine value. This approach is not generally used for assessing the value of single
family homes because these homes are not typically used for generating income. The appoach which tends
to be weighted most heavily is the Sales Comparison Approach. This approach identifies what similar properties
have sold for in the same market place over the last two to eight months, and then adjusts the values
to the comparables to make them more like the subject.
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More about the loan process . . . .
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