According to the Appraisal Institute of Canada (AIC), there are several instances in which you might need a house appraisal:
- Buying a property
- Selling a property
- Refinancing/Re-Amortizing your mortgage
- Planning your estate
- Retirement planning
- Property tax assessment appeals
- Capital gains
- Insurance coverage (before damage occurs)
However, an appraisal is most often required when buying a property as it determines the amount of funds a lender is willing to give you.
When you apply for a mortgage, your loan request is based on the market value of a property, or the price you are willing to pay for a particular home.
Your lender, however, will use the appraised value, not the purchase price, to determine the maximum amount of the mortgage loan. That’s because the lender doesn’t want to take on too much risk. If the market value is…