Property Valuation
Which type of appraisal is typically required for a residential mortgage loan?
AA broker price opinion (BPO)
BA USPAP-compliant appraisal by a licensed or certified appraiser✓ Correct
CA seller's self-assessment
DA tax assessor's valuation
Explanation
Federally regulated mortgage lenders require appraisals that comply with the Uniform Standards of Professional Appraisal Practice (USPAP) prepared by a state-licensed or state-certified appraiser, ensuring independence and professionalism.
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- The USPAP (Uniform Standards of Professional Appraisal Practice) Standards are issued by:Property Valuation
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- The purpose of an appraisal required by a mortgage lender is primarily to:Finance
- Which of the following is the primary document used by an appraiser for a standard residential appraisal?Property Valuation
- An appraiser is required to be an 'independent, disinterested third party.' This means the appraiser:Property Valuation
- Which approach is typically weighted most heavily when appraising a 4-unit residential rental property for a conventional mortgage?Property Valuation
Key Terms to Know
Appraisal
A professional estimate of a property's market value prepared by a licensed or certified appraiser.
Gross Rent Multiplier (GRM)A quick valuation metric for income properties calculated by dividing the property price by gross annual rental income.
Loan-to-Value Ratio (LTV)The ratio of a mortgage loan amount to the appraised value or purchase price of a property, expressed as a percentage.
Discount PointsPrepaid interest paid to a lender at closing to reduce the mortgage interest rate, with each point equal to 1% of the loan amount.
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