Any mortgage must be secured on a suitable property. This is most often a flat, family house or building plot. The collateral in the form of real estate must be of sufficient value to the bank. The value of the mortgaged property is calculated by the bank’s internal or external valuer. Obtaining a mortgage can be complicated if the value of the property as determined by the valuer is significantly lower than the agreed purchase price.
Banks ascertain the mortgage value of the property
The mortgage value of the property for the bank is not necessarily equal to the market value of the property. The appraiser determines the price customary in the place and time. Each bank has its own internal guidelines and conditions under which it measures the calculated mortgage value of the property against the amount of the mortgage requested.
Renovation increases property value
The value of a property is mainly influenced by its location, then its overall technical condition, size, orientation or internal layout. In the case of flats, the condition of the entire apartment building, the floor on which the flat is located or the availability of parking near the building also affects the price. The value of the property is also increased by complete reconstruction, including, for example, replacement of wiring, replacement of windows or insulation of the house.