The term property value is of vital importance to the lenders of the mortgage loan. This is because they need to accurately determine what the real value of your house will be so that they can provide mortgage according to that. Until and unless the property value of your house is assessed, no lender would be ready to provide you with the mortgage loan. To further understand this you need to learn a few terms such as appraised value and estimated value.

Estimated Value

This value of your house is just an estimate and not the real value on paper. This might be an educated guess of your perception of what the value of your house might be. Like mentioned, its just a guess keeping in mind several factors such as the present market prices on the houses in your area and the city. From that you could make a guess of what the estimate would be of your house. For this many websites also offer you services which help find the estimate of your house for which you just need to enter your house address.  While it is a nice place to start from, it is by no means an official value. It serves to give the lender a starting place for a loan.

Appraised Value

This value i found during the middle process of your mortgage. For this the bank will charge you an upfront fee and send a certified appraiser hired by them, who would come to your house and appraise the value of it. For this they wil take pictures of your house and make notes of the current position of your house which might include the physical looks and conditions.

The main reason for finding the appraised value is that it could be compared with the similar houses which have been sold in the last six months. Once this process has been done and the comparison has taken place, this would give the appraised value of your house which would then be used for processing your loan amount.

If your house is in a condition where repairs are needed then the appraiser might make a note of that so it could give a true value of your house. There repairs could include paint, flooring or any other health and safety issue.

Actual Value

Lastly, the term actual value  refers to the market price of your house. This price is the price at which your house might be sold in the market for.  You can say that your house is worth a certain price all you want, but until it sits on the open market for a fair amount of time and sells for that price, it is not.

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