Whether you are purchasing a home or looking to refinance, determining a property’s value is an essential step in the mortgage application process. You can help by providing precise and accurate information about your property to your Mortgage Professional.
How the Current Value of Your Home or Property is Assessed
The value of a property is determined by a number of different criteria, each of which can influence how much your home is currently worth. These criteria range from the square footage and the age of your home, to its location, construction quality, architectural features and even the number of bathrooms. It is important to remember that a property valuation is not a fixed or permanent number. It is simply a snapshot of what your home is worth today, in relation to current market conditions and what other, similar properties are selling for. This value can change over time based on improvements to the property, as well as changes in your neighbourhood and the overall housing market.
Property Valuation and Mortgages
When applying for a mortgage, your Mortgage Professional will ask you a series of questions about your property. This information will help establish the property value, a critical element for determining the amount of your mortgage loan.
If you are buying a home, for example, your mortgage application will include the purchase price along with a detailed description of the property. For refinancing, the lending value will be established after considering recent sales in your area, the latest municipal value assessment and any significant improvements you have made to the property. If you want to add the cost of any planned improvements to your mortgage application, be sure to provide all of your plans and cost estimates. To help the process go as quickly and smoothly as possible, use the attached worksheet to identify and collect the information you will need to complete your mortgage application.
A Professional Appraisal
A professional appraisal may be required if a more in-depth assessment of the value of your property is needed.
This process includes a professional assessment of the property’s physical and functional characteristics, a detailed comparison of the home to recent comparable sales in nearby areas, and an assessment of current market conditions affecting the property. It is important to allow the appraiser access to the property in a timely manner, in order to minimize the time required to obtain financing. From time to time, the property value assessment will not support the loan amount requested. Should this happen, talk to your Mortgage Professional, realtor or other members of your team of homebuying professionals to explore the options that are available to you.
Property Information Worksheet
Your Mortgage Professional will require the following property-related information to complete your mortgage or refinance application. If you are purchasing a property, simply provide your Mortgage Professional with the following documents where this information can be found:
-Realtor description sheets
-MLS Listing®
-Purchase Agreement
-Municipal property assessment
-Former appraisal, if available
-If applicable, identify planned or recent improvements in the Improvements to Property section.
