Definition
An appraisal is a professional opinion of a property value, often required by a lender before final loan approval.
If you are comparing mortgage options, treat appraisal as one piece of the total cost and risk picture, not a standalone detail.
Why It Matters
Appraisals matter because the lender uses value to check risk, loan-to-value ratio, and whether the home supports the loan amount.
Simple Example
If a buyer offers $420,000 but the appraisal comes in at $400,000, the loan terms may need to be reviewed.
How to Use This Term
When you see appraisal on a loan estimate, calculator result, or lender conversation, connect it to three practical questions: how it affects monthly payment, how it affects cash needed now, and how it affects flexibility later.