What Is a Mortgage Loan Appraisal Review?


Quick Answer

A mortgage loan appraisal review is a review of an appraiser's estimate of a home's value. A lender might request an appraisal review before agreeing to offer a client a loan in order to verify that a residence offered as loan collateral actually is worth the estimated amount.

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Full Answer

Appraisal reviews are common because lenders have loan-to-value requirements to fulfill, which means that the amount offered for a loan has to be balanced by the home's current value. Mortgage loan appraisal reviews occur more often when the borrower has bad credit or a high level of debt or when the home itself presents a financial risk. Another reason an appraisal review might be requested is because the original appraisal seems suspiciously high or low.

A desk appraisal review is done with an automated valuation model on a computer. A field appraisal is when a second appraiser visits the home to determine if the original appraisal was accurate. If the original appraisal isn't accurate, the lender may request a new appraisal.

Appraisal reviews usually are cheaper than a full appraisal, but the borrower bears the cost. If the lender determines that a second appraisal is needed, the borrower pays for that, as well.

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