Mortgage

Lenders require appraisals to confirm that the home’s value supports the loan amount. The loan-to-value (LTV) ratio — loan amount divided by appraised value — drives loan eligibility, interest rate, PMI requirements, and maximum loan amount. An appraisal protects both the lender and you from over-borrowing on a property worth less than expected.

The most common types are: Full Interior (Fannie Mae Form 1004), Exterior-Only Drive-By (Form 2055), Desktop Appraisal (Form 1004 Desktop), and Hybrid (Form 1004 Hybrid — inspection by trained inspector, valuation by appraiser). Each has different lender acceptance based on loan program, LTV, and AUS findings. Your lender determines which form is required.

On average, a mortgage appraisal takes 3–4 business days from inspection to completion. Total time from lender order to delivery depends on how quickly inspection access can be scheduled. Rush options are available for time-sensitive deals.

A “low appraisal” gives buyer and seller several options: (1) buyer brings additional cash to close at the original price, (2) seller reduces price to the appraised value, (3) parties split the difference, (4) buyer requests a Reconsideration of Value (ROV) with supporting evidence, or (5) the deal falls through. Most purchase contracts include an appraisal contingency that protects the buyer in this scenario.

Yes. Federal regulations (ECOA) require lenders to provide borrowers a free copy of the appraisal at least three business days before closing, or earlier on request. You can review the appraisal, ask questions, and identify any factual errors that might support a Reconsideration of Value if you disagree with the conclusion.