The mortgage appraisal – how the real estate appraisal works
The mortgage appraisal is one of the operations necessary to complete the disbursement by the bank of a loan for the purchase of a property, a home mortgage. The bank or financial institution that grants the loan to the applicant must in fact protect itself against the value and conditions of the home that will be purchased, so as not to lose out in the event of problems or any irregularities. For this reason he relies on an expert who must evaluate some technical characteristics of the building, before granting the loan.
The real estate appraisal consists of four moments, which control different aspects of the building
The first concerns the identification of the object of the loan: the appraisal requires the collection of cadastral documents and that these are compared with the data provided by the loan applicant, in order to verify that no erroneous information has been presented. The second phase is instead the calculation of the value. This procedure requires first of all the calculation of the commercial value of the property, the one to which it can be sold in the future. Furthermore, the guarantee value is also calculated, which is usually around 90% of the cost of the house. This is a useful measure for the bank in the event of the insolvency of the borrower: in that case, the expropriation could be used and the bank must have established a value to be attributed to the property.
The third phase establishes the marketability of the home
It is a different value from what we previously defined as “commercial value”. In fact, a house can often have a considerable commercial value, but at the same time be difficult to sell (perhaps because it is far from important infrastructures). Finally, the mortgage appraisal verifies the building’s regularity in the building : the expert checks that the house complies with the building regulations and, above all, that there are no cases of building abuse.
The appraisal has a cost for those who request this loan, but it falls into the category of accessory charges , which are deductible in the tax return. In particular, the deduction is triggered in the event of a loan for the first home. These deductible charges include the commission for the brokerage activities in the sale, the mortgage registration tax, the notary and investigation fees, and finally also the expenses for the mortgage appraisal. However, the deduction of ancillary charges is valid only for the first year of the loan.