To convert your pre-approval to an actual mortgage, your lender will have to approve your deal. The lender will examine all the terms of the mortgage; take another look at your income, credit ratings and debt load; and get an outside opinion as to how much the house is worth. Your new house will be collateral for the mortgage. If you don't pay the mortgage, the lender forecloses on the house. You are out of a place to live and have lost all the money you had put into the house. The lender sells the house to get back the money it had lent you. The lender has to be sure that the house you are buying is worth what you are paying: hence, the appraisal. The lender will choose the appraiser, but you can request an appraiser who is familiar with your new neighborhood. Meet the appraiser at the house with the listing sheet and the sellers' list of improvements and maintenance. Also have copies of recently sold comparable properties and any other factors that you believe support the contract price. Be sure to review the finished appraisal. It is not uncommon for appraisers to overlook value-building features such as fireplaces, bathrooms and finishes. If there are errors that affect the estimated value, request corrections. Keep a copy of the appraisal for your records.
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