An appraisal is an unbiased, objective estimate of the value of a home calculated by a third party licensed professional. It’s used whenever a mortgage is involved in the buying, refinancing or selling of real estate property. Lenders use the appraisal to determine your Loan To Value, (LTV) ratio. The appraised value is determined by such aspects as an inspection, upgrades, additions and comparable properties recently sold in the same market. If the appraised value is lower than the agreed price, the transaction can be canceled or delayed until either the seller lowers the price or the buyer increases the down payment.