Appraised value refers to the estimated value of an
asset, such as a property, that is used as
collateral for a
loan. The appraised value is used to determine the amount of money that can be borrowed against the asset.
Appraised value is important in securitisation because it helps to mitigate risk for investors. If the value of the asset declines, the investors will still be able to recover some of their money from the sale of the asset.
Appraised value is typically determined by a qualified appraiser who uses a variety of factors to estimate the value of the asset. These factors may include the location of the asset, the condition of the asset, and the current market value of similar assets.
Appraised value is not always accurate, and it can be affected by a number of factors, such as changes in the market or the condition of the asset. Investors should carefully consider the appraised value before investing in a securitisation.