Low Appraisal? Find Out What It Really Costs to Solve It.
Enter three numbers. See the actual options — including one most people don't know exists.
When an Appraisal Comes in Low, Most People Don't Know What Their Options Are
About 10% of purchase transactions nationally result in an appraisal that comes in below the agreed purchase price — and in Florida, that number tends to run higher. When it happens, buyers, sellers, and agents typically assume they're facing a binary choice: reduce the price, or bring more cash to the table. In many cases, that's not the full picture.
This calculator is designed to show you the third option — single premium mortgage insurance — and what it actually costs to deploy it on a specific transaction. The numbers often surprise people.
Three Inputs
- Agreed purchase price — what buyer and seller agreed to in the contract
- Loan amount requested — what the buyer is borrowing
- Appraised value — what the appraisal report came in at
What You Get
- Whether the gap actually creates a financing problem
- What the standard approach costs (full price reduction or cash)
- What single premium MI costs — and whether it applies
- Who can pay the fee (buyer, seller, agent, or split)
This tool is built for buyers who want to know if there's a way to keep the deal structured the way they wanted it, for sellers who want to understand whether a small concession can keep a buyer at the table, and for real estate agents in South Florida who need a fast answer before deciding whether to walk away from a transaction.
This tool is designed for buyers, sellers, and agents who are interested in keeping a transaction together when an appraisal comes in below the agreed purchase price. Paying above appraised value is a personal decision that buyers make every day for a wide variety of reasons. This tool takes no position on that decision — it simply illustrates the financing options that may be available when all parties want to move forward.
Frequently Asked Questions
What is an appraisal gap calculator?
An appraisal gap calculator shows you the financial options available when a property appraises below its agreed purchase price. This calculator specifically illustrates how single premium mortgage insurance can be used to bridge the gap — often for a fraction of the full shortfall amount.
How do I use this low appraisal calculator?
Enter three numbers: the agreed purchase price from the contract, the loan amount the buyer is seeking, and the appraised value from the appraisal report. Click "Show Options" and the calculator will tell you whether a gap exists, how large it is, and what it would cost to resolve it using the standard approach versus single premium MI.
What options do buyers and sellers have when an appraisal comes in low?
There are three main options: (1) the seller reduces the purchase price by the gap amount, (2) the buyer brings additional cash to cover the difference, or (3) if the loan-to-value lands in the right range, single premium mortgage insurance can be paid upfront — by any party in the transaction — to eliminate the mortgage insurance obligation created by the gap. In many cases, the third option costs significantly less than the full gap amount.
What is single premium mortgage insurance and how does it help with a low appraisal?
Single premium mortgage insurance is an upfront, one-time fee that permanently covers the mortgage insurance requirement for the life of the loan. When a low appraisal pushes a buyer's loan-to-value above 80%, it triggers a mortgage insurance requirement. Instead of making monthly PMI payments or absorbing the full appraisal gap, a single premium MI payment can satisfy that requirement upfront — often for a few thousand dollars. That fee can be paid by the buyer, seller, agent, or split among any combination of parties.
Who can pay the single premium mortgage insurance fee?
Anyone involved in the transaction can pay the single premium MI fee — the buyer, the seller, the real estate agent, or any combination. This flexibility is what makes it a practical tool for keeping a deal together when the seller does not want to reduce the price and the buyer does not want to bring more cash to closing.
Does a low appraisal always mean I need more money to close?
Not always. If the buyer has a large down payment, the appraisal gap may not affect the loan-to-value enough to create a problem. If the buyer was already in mortgage insurance territory before the appraisal, the gap may not change the MI tier at all. This calculator checks all of these scenarios automatically and tells you whether the transaction is actually affected before assuming any additional money is needed.
What if my appraisal gap is too large for this tool to help?
This calculator covers transactions up to approximately 97% loan-to-value, which is the range where single premium MI is typically available. For larger gaps or minimum-down-payment loans like FHA, the options are more limited. The calculator will tell you when the situation falls outside this range and what conversation to have with your loan officer instead.
