Home Appraisal Gap Calculator
In competitive housing markets, homes can appraise for less than the agreed purchase price. This calculator shows the size of that appraisal gap and how much additional cash you may need to bring to closing to keep your deal together.
About this calculator
Estimate the cash gap you'd need to cover if a home appraises below the agreed purchase price, and see how it affects your loan-to-value ratio.
Frequently Asked Questions
What is an appraisal gap?
It's the difference between the agreed purchase price and the appraised value of a home. Lenders typically base loans on the lower of the two figures, so buyers often must cover the difference in cash.
Can I negotiate the appraisal gap with the seller?
Yes, buyers can ask sellers to lower the price, split the gap, or the buyer can agree to pay the full gap in cash to keep the deal moving, depending on contract terms.
Does mortgage insurance change based on appraised value?
Yes, lenders typically calculate loan-to-value ratios (and thus PMI requirements) using the lower of purchase price or appraised value.