A home is one of life’s most important purchases. Before committing to a purchase it makes sense to learn as much as possible about any property you wish to acquire. Understanding the important differences between an appraisal and a home inspection will help you to obtain detailed information about the home’s value and condition. An Appraisal An appraisal allows the lending institution to determine if the property being purchased is suitable as security for a mortgage. For conventional mortgages, a lender will in most cases require that a professional third party assess the property to ascertain its current market value. In the case of a “high-ratio” mortgage (with a down payment of less than 20 per cent), the mortgage insurer will go through its own internal appraisal process. In particular, lenders and insurers are concerned that the property (in terms of its age, condition, and remaining economic life) constitutes a good match with the borrower and their ability to repay the mort...