$112,000 estimated cash need; $3,000 remaining before reserves.
Realtor-ready explanation
Appraisal Gap and Cash-to-Close Simulator
Turn price, expected appraised value, planned down payment, available cash, and estimated costs into a concise visual scenario that a loan officer can explain to buyers and realtor partners.
APPRAISAL SHORTFALL SCENARIO
Show the gap without the jargon.
Use rounded, hypothetical amounts only. Do not enter a property address, borrower name, loan number, or appraisal document.
REALTOR-FRIENDLY SUMMARY
Contract price$500,000
Appraised value$475,000
Shortfall$25,000
APPRAISAL SHORTFALL$25,000Contract price minus expected appraised value
$132,000 estimated cash need; -$17,000 remaining before reserves.
- Planned loan
- $400,000
- Modeled LTV
- 84.2%
- Original-path cash need
- $112,000
- 80%-path cash need
- $132,000
- Additional down to model 80% LTV
- $20,000
- Mortgage-insurance review
- Generally needed above 80% LTV
Educational scenario only—not an appraisal review, renegotiation strategy, quote, approval, or commitment. Purchase LTV generally uses the lower of price or appraised value. Mortgage insurance may apply above 80% LTV but its form and cost cannot be inferred from LTV alone. Product, occupancy, property, lender, investor, insurer, credits, concessions, and contract terms require file-level review.
How does an appraisal shortfall change the LTV conversation?
For a purchase, the LTV denominator generally uses the lower of price or appraised value. A lower appraisal can therefore raise modeled LTV even when the planned loan amount does not change. Conventional mortgage insurance is generally required above 80% LTV, but its exact form and cost require lender and insurer review.
Primary references
Verify the live rules and assumptions.
Program, regulation, and vendor information can change. Use the current source alongside lender, investor, legal, compliance, and file-level review.
Plan your processing lane
Need a second set of operational eyes?
Request a scenario-level conversation about scope, lender workflow, systems, and processing fit. Do not send borrower information or loan documents through this website.
- No borrower file needed
- Scope comes first
- Leave with a clear next step