When you are applying for a home loan, whether to purchase a new home or to refinance your current home, you will need an appraisal. The best person to help guide you through this process is your mortgage broker.

An appraisal is, in essence, an opinion of the value of your home, determined by a licensed individual. The appraiser is normally chosen by the lender. Included in the report is the neighborhood, comparisons of other similar homes, what they are selling for, and the condition of your home. This completed assessment will normally cost between $300 and $500.

Preparing for an appraisal is the same as preparing to sell or show your home.  Maintenance inside and out is essential. Inform him or her of new windows, flooring, a newly finished basement and any other remodeling recently completed.

When the numbers come in

If the appraisal comes in lower than you expect, it can affect or even prevent getting the loan. If you're buying, you can offer more down or the seller can lower the price - either way could allow the transaction to be finalized. If you're refinancing, you could dispute the appraisal. You will need to do a comp analysis to see where the differences are, and what might make your home more valuable. Verify that the appraiser is familiar with your town or neighborhood, specifically. You can also request a different appraiser for the second opinion.

Always remember that you want your house to show well so your appraisal will be as high as possible. And also remember that an appraisal is an opinion which can be changed, if you can provide the proper information to support your request.