Appraisal & Property
How a Mortgage Appraisal Works
Who orders the appraisal, what the appraiser looks at, how value is determined, and when a loan can close without a full appraisal.
Updated 2026-08-21| Applies to: Buyers and refinancing homeowners.
The short answer
The lender orders an independent appraisal to confirm the property is worth enough to secure the loan. The appraiser compares recent sales of similar nearby homes, adjusts for differences, and reports a value. Some low risk loans receive an appraisal waiver instead.
An appraisal is not an inspection and it is not an opinion of what you should have paid. It is a supported estimate of market value used to protect the loan.
How value is determined
- 1.The appraiser selects recent sales of comparable homes near the subject property
- 2.Each comparable is adjusted for differences in size, condition, age, garage, lot and updates
- 3.The adjusted values are reconciled into a single opinion of value
- 4.Condition issues that affect safety, soundness or habitability may be noted as required repairs
Appraisals in older Northeast Ohio neighborhoods
Much of the local housing stock varies block to block, and a heavily updated century home can sit next to an original one. That makes comparable selection and adjustments unusually important here, and it is a common reason a value comes in differently than a buyer expected.
Waivers and alternatives
- An appraisal waiver may be offered by the automated underwriting system on some low risk loans
- Some transactions use a desktop or hybrid product instead of a full interior inspection
- Government backed loans have their own appraisal requirements, including minimum property standards
Availability of waivers depends on the loan program, the data available and the specific file. General education, not a commitment to lend.
Frequently Asked Questions
People also ask
Are closing costs the same for every loan program?
No. Some programs have specific limits on certain fees or allow different levels of seller contribution, so costs can vary by program even for the same purchase price.
Read: How Much Will My Closing Costs Be?Will my lender require a home inspection?
Generally no. Lenders typically require an appraisal, not a full home inspection, though a specific loan program or lender could have additional property-related conditions in certain cases.
Read: Is a Home Inspection Required to Get a Mortgage?Who pays for the appraisal?
The buyer typically pays, often up front. The report is ordered by the lender through an independent process.
Read: What Happens if the Appraisal Comes in LowIs an appraisal the same as a home inspection?
No. An appraisal establishes value for the lender and flags certain conditions. An inspection is a detailed review for your benefit as a buyer.
Read: Appraisal Repairs and Property Condition RequirementsCan I request a waiver?
No. It is a system offer based on the data and the loan profile.
Read: Appraisal Waivers and Reconsideration of ValueCan I request an appraisal waiver?
You cannot order one. A waiver is offered through automated underwriting when the loan, property and transaction data qualify, and it can be withdrawn if the file changes.
Read: Types of Mortgage Appraisals and Property ValuationsTerms used in this guide
- Appraisal
- An independent opinion of a property's market value, ordered by the lender and based largely on comparable sales.
- Market Value
- The price a willing buyer and seller would agree to under normal conditions, estimated through comparable sales.
- Comparable Sale
- A recently sold, similar property used to estimate value for an appraisal or pricing decision.
- Loan to Value
- The loan amount divided by the property value. A $200,000 loan on a $250,000 home is an 80% LTV.
- Appraisal Contingency
- A contract provision allowing the buyer to renegotiate or cancel if the appraised value comes in below the purchase price.
Written by
Manny Oloyede, Mortgage Broker
NMLS #1824463 | Ultimate Mortgage Brokers LLC NMLS #2619461 | Licensed in OH | KY | NC | PA | SC | TN | TX
I have worked in mortgage lending since 2018 out of the Akron / Cuyahoga Falls Branch, helping buyers, homeowners and investors across Northeast Ohio and every state where I am licensed. These guides reflect the questions I answer most often, written the way I would explain them on a call.
Keep reading
What Happens if the Appraisal Comes in Low
Why appraisals come in below the contract price, the five options buyers and sellers have, and how a reconsideration of value works.
Appraisal & PropertyAppraisal Repairs and Property Condition Requirements
Which property conditions trigger required repairs, how appraisal subject to repairs works, and what it means for older Northeast Ohio homes.
Buying a HomeIs a Home Inspection Required to Get a Mortgage?
Understand the difference between a home inspection, an appraisal, lender property requirements, and why an inspection is usually a buyer's choice.
Mortgage CostsHow Much Will My Closing Costs Be?
Understand the main categories that make up mortgage closing costs, including lender fees, title, taxes, insurance, escrows, and credits.
Questions about your own numbers?
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