How can an appraisal of a model(s) home be used to establish a market value for calculating the LTV ratio?
An appraisal of a model(s) provides a market value of a particular home in a given development, considering the cost of construction and the market value of the model’s unique features and floor plan on a typical lot. Normally, an institution will obtain an appraisal for each model or floor plan that a borrower is planning to build and offer for sale. The model appraisal is based on the price of a “base” lot in a particular development without consideration to the costs of, or value attributed to, specific options, upgrades, or lot premiums.
