Significance

• An appraisal is needed on a home to determine its value in relation to the sales price. Additionally, it tells the lender the condition and location of the property as well.
  
  

Function

• The VA appraiser's appraisal is considered to be the official value of the property, regardless of the sales price associated with the loan.
  
  

Types

• Any home loan requires an appraisal, however, a VA mortgage requires additional documentation on the part of the appraiser than a conventional mortgage does.
  
  

Considerations

• If an appraisal comes back on a potential VA mortgage purchase and the value of the home is lower than the sales price, the terms of the sale must be renegotiated. A borrower cannot borrow more than the appraised value.
  
  

Misconceptions

• The appraised value and the tax value of a home are not the same thing. They could be very different amounts, depending upon the situation.