What happens if the appraisal comes in low at final closing
Doorvia Guides · July 4, 2026
Lenders finance a percentage of appraised value, so a shortfall becomes cash you must bring on closing day.
Your lender lends against the lower of purchase price and appraised value. If a condominium was bought several years ago at a price above where similar suites now appraise, the mortgage shrinks and the gap becomes your problem.
Example: on a $700,000 purchase appraising at $650,000, an 80 per cent mortgage falls from $560,000 to $520,000, so you need $40,000 more in cash than planned.
Mitigation is mostly preparation: keep reserves, ask your broker about lenders that consider the original agreement, and get an early opinion of value from an agent active in the building. If the shortfall is unmanageable, discuss options with your lawyer well before closing.
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