What type of loan does an appraisal notice pertain to?

An appraisal notice pertains specifically to a first lien loan secured by a dwelling because this type of loan typically requires an appraisal to determine the value of the property being used as collateral. The appraisal process is essential in assessing the market value of the home, which directly impacts the loan amount and terms.

In mortgage lending, the appraisal notice is part of the disclosure requirements to inform borrowers about the use of an appraisal in their loan application. This aligns with regulatory standards and ensures that borrowers understand the implications of the home’s value on their financing.

Other types of loans, such as personal loans or revolving lines of credit that are not secured by real estate, do not require appraisals, as there is no property collateral involved. Therefore, the focus on first lien loans secured by dwellings illustrates the specific circumstances under which an appraisal notice is relevant.