In most private mortgages the borrower pays for the appraisal, but a small number of lenders pay for it and a few cover every upfront cost, recovering it through a larger balance at the end. Ask before you order one, and compare the total cost of the deal.
A private mortgage is approved mainly on the property, so the lender needs to know what it is worth and how easily it could be sold. That is what an appraisal answers. It is also why the appraisal is one of the first costs a borrower runs into, and one of the easiest to get wrong. This guide is part of our wider look at how private lenders differ and what to ask, and it focuses on one question: who pays for the appraisal, and how can you keep that cost under control?
Yes, some lenders pay. On most private mortgages the borrower pays for the appraisal, but a small number of lenders order it themselves and cover the cost when one is needed. A few go further and cover the other upfront costs as well, so the borrower receives the full amount instead of having fees taken out of the funds. These programs are the exception, they are not available on every file, and the cost is recovered another way, usually through a larger balance owed at the end. That is why the total cost of the deal matters more than any single fee. We explain how this works in borrowing $100,000 and receiving $90,000.
Across the lender programs we work with, the lender usually controls who orders the appraisal, and what varies is who pays. The details differ by lender and change without notice, so treat this as a map and not a promise.
1. You pay for it. This is the most common. The lender requires an appraisal from an approved list of appraisers or through its own ordering channel, and the borrower pays for it. Some lenders also require the report to be addressed to them, which is why ordering your own appraisal in advance can backfire.
2. The lender orders it, but how it is billed varies. When the lender arranges the appraisal, ask exactly how the cost is charged and when, because it may be paid up front, taken from the proceeds or built into the fees.
3. The lender covers it, and sometimes everything else. A small number of lenders order the appraisal themselves and pay for it when one is needed. A few go further and also cover the lender fee, the broker fee, administration and legal fees, including both lawyers on larger loans, so the borrower receives the full amount of the mortgage. Those costs are not free. They are recovered through a larger balance owed at the end of the term, and that balance can grow further if payments during the term are small or deferred. These programs exist, but they are the exception, they tend to suit smaller loans, and the conditions depend on the file.
There is also a fourth situation. Some small-loan programs rely on automated valuations and skip a full appraisal. They can be fast, but they tend to carry higher fees as a share of the loan, so a missing appraisal fee does not always mean a cheaper mortgage.
Usually not. Most private lenders accept appraisals only from their approved appraisers, and the report is often prepared for the lender. If you have already paid for an appraisal before choosing a lender, ask whether it will be accepted. In many cases it will not, and the cost is lost.
Sometimes. Some lenders may waive the appraisal on certain purchases, and on a refinance some will consider a recent appraisal if one is available. These are decisions made file by file, so ask before assuming either way.
Ask first, order later. Do not order an appraisal until you know which lender is taking the file and who they want it from.
Compare the total cost, not just the appraisal line. A lender that covers the appraisal may charge more elsewhere, and one that charges for it may price the rest of the deal lower. Look at the lender fee, broker fee, legal costs and appraisal together. Our private mortgage rates and fees guide explains the main pieces.
Find out what happens if the deal does not close. Ask who bears the appraisal cost if the mortgage falls through, and get the answer in writing.
Match the loan to the program. If your file qualifies for a program with different appraisal rules, it can change the cost of the deal, but only the lender's conditions decide that. An experienced agent can tell you which programs your file might fit.
The appraisal is also one of the steps that sets your closing date. It has to be booked, completed and sent to the lender before the file can move to funding. If speed matters, ask the lender how long its appraisal step usually takes, and book it as soon as the lender confirms who to use.
The appraisal is a real cost, and who bears it varies more than most borrowers expect. Before you order one, ask who orders it, who pays, whether an existing report would be accepted, and what happens if the deal does not proceed. If you would like to know which programs might fit your property and your timeline, contact us and we will walk through the options. This article is general information as of October 2026, not legal, tax or mortgage advice, and lender terms vary and change without notice.
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