In Ontario, homebuyers are often surprised when a mortgage deal stalls, not due to credit or paperwork issues, but because of a home appraisal. It is a required part of the mortgage process, which is why it carries real weight.
An appraisal tells the lender what the home is actually worth. The identified property value paints a clear picture of how much you can borrow and how your mortgage is structured. Sometimes, it also influences the conditions that apply during your mortgage process.
This blog explains the concept of a home appraisal, its impact on your mortgage, and the best pathway to a simplified process.
What is a home appraisal?
A home appraisal is a formal, third-party evaluation of a property’s fair market value. It is conducted by a certified and licensed appraiser who is trained to assess several aspects of the home. The final report provides an unbiased estimate of property value.
This value is important for lenders and brokers. It helps determine how much financing they are willing to offer in your mortgage application. If the property value does not support the purchase price, your loan terms may change.
What the Appraiser Looks At
Appraisers do not make guesses. They follow a clear home appraisal checklist to assess the true worth of a property.
First, they examine the home’s condition, inside and out. They look at the size, layout, and number of rooms. Upgrades like a finished basement or renovated kitchen count. Safety features, recent repairs, and signs of damage are also assessed.
Location matters, too. Schools, banks, nearby amenities, and the overall neighbourhood affect home value.
Appraisers also compare your home to similar ones that have recently sold. They usually use a property value estimator to support their findings.
The final report combines their notes and the home appraisal checklist. Data from the property value estimator is also included to ensure accuracy and that a fair valuation is achieved.
When and Why It Happens
A house appraisal takes place after your offer is accepted. It is part of the mortgage process. It is the standard requirement when buying a home or refinancing an existing mortgage.
The lender orders the appraisal (not you) because they need an unbiased opinion of the property’s worth.
Brokers rely on this step to structure your loan properly. The home value reported in the appraisal must align with the price you are paying. If there is a significant gap, the mortgage process will not proceed.
Impact on Your Mortgage
If the house appraisal matches or exceeds the purchase price, the process moves smoothly. You can qualify for favourable loan terms. If the house value estimator suggests the property is worth more, you may be provided with a larger loan.
However, if the house appraisal comes in lower than expected, it creates challenges. Lenders might lower the loan amount. This will force you to increase your down payment or renegotiate the sale price.
In some cases, the mortgage application can be delayed or denied until these issues are resolved.
What It Might Cost
The typical house appraisal cost in Ontario ranges from $300 to $500. This is usually paid by the homebuyer upfront, and often during the mortgage application process.
Some lenders or brokers may include the property appraisal fee in your mortgage fees, but it is important to confirm this early. Since the property appraisal directly influences your loan amount, the cost is a necessary step in securing financing.
Northwood Mortgage: Guidance You Can Trust
The mortgage process is like planning a cross-country move. You know where you want to go, but the route is packed with details, decisions, and paperwork. Without the right guide, it is easy to take the wrong turn.
Northwood Mortgage is one of the GTA’s most reliable brokers, with decades of experience. We act as your co-pilot and walk you through the entire mortgage application.
Our team helps you understand lender requirements and breaks down financial terms you might overlook. We also introduce helpful tools like the property value estimator. This enables you to understand how your home’s worth shapes loan options.
Every detail matters. With Northwood Mortgage, the mortgage process becomes far less stressful!
Reach out to us today at 888-495-4825 or contact us online to speak to our experts and get answers about appraisals and steps to have a successful mortgage.
