An appraisal determines the value of the property in question, which becomes a prime factor in determining the loan-to-value (LTV) ratio. Your LTV is important because it determines your equity in the property.

Who completes an appraisal? An appraiser is an authorized professional who estimates the value of the property and sends the information to you and your mortgage company. Typically, the mortgage lender or broker will arrange for the appraisal.

Remember that, although you pay for the appraisal ordered by the lender, the lender uses it to make a decision regarding whether it will make the loan. You should consider ordering your own appraisal to enable you to make your own assessment regarding the value of the property.