Your Mortgage Knowledge Base

An appraisal is an unbiased third-party assessment of a home’s current market value. In a real estate transaction, an appraiser completes an inspection of the home, and the lender and borrower are provided with a copy of the appraisal report to document the appraiser’s opinion of value.

The appraiser will determine the value of a property based on several factors, including the following:

• Market research performed
• Results of their onsite inspection
• Property specific amenities and characteristics
• Overall property condition and quality
• Comparison of similar properties that have recently sold

Typically, mortgage transactions require an appraisal, as the value of the home is a key element of the mortgage loan process. However, some circumstances do allow for other value assessment options that your Loan Officer will discuss with you if they are available.

Both are intended to evaluate a property’s condition. However, an appraisal provides an opinion of value, while a home inspection does not.

While the appraised value can fluctuate based on market conditions, the home inspection is focused on the home’s structural integrity and overall condition.

During a purchase transaction, the buyer has the option to elect for a home inspection to be performed.

• Ensure your home is free from health hazards and safety violations
• Curb appeal is key, and first impressions of the home’s exterior can make a difference so make sure your yard is neat and well-kept.
• Inside the home, be sure to declutter and clean up all areas of the home. Remove visible dirt and messes from floors, sinks, toilets, and showers/tubs. Life can get messy as we all know, but when it’s picture day for your home it’s best to give it the best appearance possible.
• Make minor repairs when possible. Even small repairs can make a big difference. Leaky faucets, small holes in the wall and pet damage can all contribute to the overall condition of the home.
• Document all recent improvements made to your home and be ready to answer any questions from the appraiser regarding the date, cost, materials, etc.
• To avoid revisit fees, ensure the appraiser will be able to access all areas of your home during the inspection including attics and crawl spaces, as well as utilities like electricity, plumbing, and heat.

No. On a purchase transaction, the appraiser will contact the seller or realtor to coordinate access to the home for the appraisal inspection.

The value of your home directly impacts your Loan to Value (LTV) ratio. LTV is calculated by dividing the loan amount by the appraised value. For example, if you borrow $80,000 on a home valued at $100,000 your LTV is 80%. LTV is considered when determining factors such as your loan approval, loan program, interest rate, and mortgage insurance requirements.

On a purchase transaction the Loan to Value (LTV) ratio is calculated by dividing the loan amount by the lower of either the purchase price or the appraised value.

• If the appraised value is higher than the purchase price, it means you’ve agreed to pay the seller less than the home’s current market value. Your LTV is calculated by dividing the loan amount by the purchase price. For example, if you borrow $80,000 on a home with a purchase price of $100,000 your LTV is 80%.
• If the appraised value is less than the purchase price, it means the price of the home is more than the home’s current market value. In this scenario, the LTV is calculated by dividing the loan amount by the appraised value. In this example, if you borrow $80,000 on a home with a purchase price of $100,000 but the appraised value is determined to be $90,000, your LTV is 88.88%. This increase in the LTV can impact factors such as your loan approval, loan program, interest rate, and monthly mortgage insurance requirements.

Note: There are options to consider when the appraised value of the home is less than the purchase price. Your loan officer will discuss available options which can include restructuring your loan by increasing the loan amount or the amount of down payment. Or you can consider negotiating with the seller to lower the purchase price to be in alignment with the appraised value. Be sure to review your purchase agreement for any clauses or stipulations related to the appraised value of the home.

If you do not agree with the value or the information contained in the appraisal report, you have the option to submit a Customer Appraisal Dispute Request Form. Below are examples of dispute requests that can be submitted for review.

• Reconsideration of Value Request – If it is determined that there is market evidence that supports a higher value, this information can be submitted to the appraiser for consideration. An example of market evidence is a recent sale, like the subject property, in the same or a nearby competing market area.
• Error Corrections Request – If it is determined that the appraisal report contains errors or omissions, the errors or omissions can be submitted to the appraiser for review and correction.
• Second Appraisal Request – If it is determined that the appraisal report is deficient, a new report can be considered.

For additional information on submitting a Customer Appraisal Dispute Request Form, please refer to the Appraiser Independence and What do I need to know when completing the Customer Appraisal Dispute Request Form? FAQs below.

When completing the Customer Appraisal Dispute Request Form it is important to explain your concerns with as much detail as possible and provide supporting documentation when it is available.

• Be sure to complete all fields in the Contact Information section, a CCM Representative will get in contact with you.
• Explain the reason for your request, including as much detail as possible.
• If you are disputing the appraised value, you can provide up to 5 comparable sales. The sales should be recent sales that were not included on the appraisal report, and should be like the subject property in size, condition, and location.
  • Size – Additional sales you provide should be close in size to the subject property. It is important to note that only square footage completely above grade is considered. Basements, whether they are finished or unfinished, cannot be included in the square footage.
  • Condition – Additional sales you provide should be in the same or similar condition to the subject property.
  • Location – Additional sales you provide should be in the same market area, or a nearby competing market area.
• How to Initiate the Customer Appraisal Dispute Process
  • Option 1: Discuss the appraisal with your Loan Originator. After your discussion, they can submit these corrections on your behalf.
  • Option 2: Directly make an inquiry by emailing [email protected].
  • Option 3: Directly make an inquiry by calling 866-306-2804, Option 0.

Thank you for choosing CrossCountry Mortgage, LLC for your home loan needs.

We are committed to maintaining appraiser independence and preventing attempts to influence appraisers in the preparation of appraisal reports, as well as avoiding any discrimination or bias in the appraisal process.

While reviewing your appraisal, if you see inaccuracies that could impact the value of your home, have knowledge of better comparable properties, suspect an attempt to influence the appraiser in the preparation of the appraisal, or have concerns of discrimination or bias, we strongly encourage you to utilize the Customer Appraisal Dispute Process detailed below. During the escalation process, you may be asked to complete the Customer Appraisal Dispute Request Form, which will initiate one of the following when completed:  

• Reconsideration of Value Request (“ROV”) – If it is determined that there is market evidence that supports a higher value, this information can be submitted to the appraiser for consideration. An example of market evidence is a recent sale, like the subject property, in the same or a nearby competing market area.
• Error Corrections Request – If it is determined that the appraisal report contains errors or omissions, the errors or omissions can be submitted to the appraiser for review and correction.
• Second Appraisal Request – If it is determined that the appraisal report is deficient, a new report may be considered.

How to Initiate the Customer Appraisal Dispute Process

• Option 1: Discuss the appraisal with your Loan Originator.  After your discussion, they can submit these corrections on your behalf.
• Option 2: Directly make an inquiry by emailing [email protected].
• Option 3: Directly make an inquiry by calling 866-306-2804, Option 0.
• Option 4: Self-initiate the inquiry by visiting the Company’s website at www.CCM.com, then navigating to Resource Center, selecting the FAQ’s drop-down, and clicking Appraisal FAQ’s. Select the What are my options if I disagree with information in the appraisal?, which will provide specific direction regarding initiating the Customer Appraisal Dispute Process. Be sure to click the link for the Customer Appraisal Dispute Request Form, which provides further direction on completing and submitting the Form.

Information Required for the Customer Appraisal Dispute Request Form

• Borrower Name
• Subject Property Address
• Effective Date of the Appraisal
• Appraiser Name
• Date of the ROV Request
• Identification and description of unsupported, inaccurate, or deficient areas in the appraisal report
• Additional data, information, and comparable properties (not to exceed five), and the related data sources (for example, the MLS listing number)
• An explanation of why the new data supports the ROV

Important Information about the Customer Appraisal Dispute Process

• Only one borrower-initiated Reconsideration of Value is permitted per appraisal.
• Upon receipt of the Customer Appraisal Dispute Request Form, CrossCountry Mortgage, LLC will review the Form for completeness/accuracy. If the Form is completed appropriately with all required information and valid new comparables, as applicable, the request will be delivered to the appraiser for their review.
• Generally, the time from CrossCountry Mortgage, LLC receipt of a complete Customer Appraisal Dispute Request Form to the appraiser final response is expected to be 2-3 business days.
• The appraiser will respond to the request within the body of the appraisal report, which will be delivered to you using the same means the original report was delivered.

If you have any other questions regarding the appraisal process, you can always discuss them with your Loan Originator.