Buying a Home
Understanding the Appraisal
Published 2026-07-31 · Last reviewed 2026-07-31 · Reviewed by Jim Lyddon, NMLS #2573609
An appraisal is an independent opinion of a property's market value prepared for the lender. The appraiser considers recent comparable sales, condition, size and features. Lending decisions use the lower of the appraised value or the contract price, which is why a low appraisal changes the financing math.
What to know
- Ordered by the lender through an independent process.
- Comparable sales in the same market area drive the conclusion.
- A low appraisal opens options: renegotiate, adjust financing, or reconsider.
- Some property conditions must be addressed for certain programs.
How Jim approaches this
Bring your specific numbers. General education gets you oriented, but the decision only becomes clear when it is run against your income, your cash position, the property you are considering and how long you plan to keep the loan. That conversation is free and does not require an application.
The information on this website is provided for general education only and does not constitute financial, tax or legal advice. Loan programs, guidelines and availability are subject to change and to borrower and property qualification.
JHL Mortgage, Inc. is an Equal Housing Opportunity lender. We do business in accordance with the Federal Fair Housing Law and the Equal Credit Opportunity Act.