Property Valuation
In Montana, a 'drive-by appraisal' (exterior-only inspection) may be appropriate for:
AAll residential mortgage transactions
BCertain low-risk refinance transactions where the lender has comfort about the property's condition based on prior appraisals and loan-to-value ratios✓ Correct
CAll properties regardless of loan type or risk
DCommercial properties only
Explanation
Exterior-only (drive-by) appraisals may be appropriate for certain low-risk transactions—such as rate/term refinances with strong equity and recent full appraisals—where the lender's risk is limited and a full interior inspection would not be cost-effective.
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Key Terms to Know
Appraisal
A professional estimate of a property's market value prepared by a licensed or certified appraiser.
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.
Comparable Sales (Comps)Recently sold properties similar in size, condition, and location used by appraisers and agents to estimate a property's market value.
Short SaleA sale of real property where the sale proceeds are less than the outstanding mortgage balance, requiring lender approval.
Math Concepts
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