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Mortgage Glossary

Terms & Definitions


An appraisal is the process of a real property being inspected by a professional appraisal company for the purpose of determining the value, condition, and marketability of a property.

Who Can Do An Appraisal On A Property?

Any appraiser or appraisal company designated by the Appraisal Institute of Canada can do an appraisal of a property. Most mortgage lenders have a list of companies they will accept appraisal reports from. This is called a list of preferred appraisal companies.

What Is Included In An Appraisal Report?

Once a physical, on-site, inspection has been completed, the appraiser will generate an appraisal report to include the following details, among other details, about the subject property:

  • Condition of the interior and exterior of the subject property (with photos)
  • Square footage of the property
  • Comparable sales using a comparison approach for properties sold in the neighbourhood that are comparable properties to the subject property
  • The final estimate of the value of the real estate based on comparable sales price in the subject property neighbourhood
  • A short narrative regarding the real estate appraisers analysis and conclusions of the property
  • Limiting conditions they recommend a lender to lend on the property when homeowners are refinancing

When Is An Appraisal Report Required?

When buying a home, and getting a conventional mortgage most lenders will require a full home appraisal to confirm the contract price of the home purchase.

When refinancing a mortgage with lenders or banks, the maximum loan amount a homeowner can refinance is 80% loan-to-value (LTV) of the appraised value of the home.

When getting a second mortgage, home equity loan, or private mortgage most lenders will provide financing up to 85% or 90% loan-to-value (LTV) of the appraised value.

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