When you apply for a mortgage loan you will be recquired to pay for and have an appraisal on the property in question. An appraised value (USA) or mortgage valuation (Australia) pertains to the assessed value of real property in the opinion of a qualified appraiser or valuer. It is usually used as a pre-qualification & risk-based pricing factor related to the issuance of mortgage loans by a financial institution. Fees can range from $200 US up to $600 US per application.

When obtaining a mortgage the funding lender relies on the standardized valuation methods of an appraiser to asses a monetary value for the specific piece of real property on which a loan will be secured (e.g. a residence). The lender will then justify the loan amount (and other risk-based pricing) factors as a percentage of the appraised value of the property.

Appraised values can also be made after a property sale. For example, home owners wishing to gain access to their increased equity in their home may obtain a mortgage valuation to prove its value has risen and thus justify increasing the amount of their mortgage. Also, the various states of Australia each have a Valuer-General's Department, which regularly assess land values in all municipalities and shires for the purpose of issuing property tax notices.

A low appraised value will affect a buyer's ability to purchase a property. This is because the loan amount would seem too high with respect to the value. Unless the buyer can come up with the difference, the buyer will unlikely be able to qualify for the loan.

Lenders will loan a partial amount of the home up to 110% of the appraised value depending on the institution.

Fraud in appraisal usually happens during upturn markets. When a homeowner is looking to refinance their home, the appraiser is sometimes under pressure by a lender to overvalue the home to make the refinancing more attactive. There is also a tendency for an appraiser to overvalue a home when houses are selling for more than they are worth. This practice is becoming less prevelant as the housing market slows or goes down in value. Apprasors are regulated and for the most part give good evaluations.