There will be all sorts of different viewpoints when it comes to how much a property is worth. The lenders want to have the most objective opinion possible when they’re determining the value they’ll accept.
For an existing property:
- the lower of the purchase price or the appraised value.
For a propety that is under construction:
- if you’re buying direct from a builder, then the lending value would be the lower of the purchase price (how much you’re paying the builder for the house) or the appraised value.
- if you’re building the property yourself, then it would be the lower of the cost to construct or the appraised value. You are also a rock star with some mad skillz.
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