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Assessed Value
What Is Assessed Value?
Assessed value is the dollar value assigned to a property by a local government for property tax purposes.
It is not the same as market value or appraised value.
Why It Matters in a Mortgage
Assessed value affects:
- Property tax obligations
- Monthly escrow payments
- Overall PITI amount
Higher assessed value often results in higher property taxes.
How It Works
Local tax authorities determine assessed value based on formulas and periodic reassessments.
Property taxes are calculated as:
Assessed Value × Local Tax Rate
Assessed Value vs. Appraised Value
Assessed → Used for taxes
Appraised → Used for lending
FAQs About Assessed Value
Can assessed value differ from purchase price?
Yes.
Can I appeal assessed value?
Often yes.
Does assessed value affect loan approval?
Indirectly through taxes.
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