Michael Holigan: When you're on the brink of buying a home, your lender has a final safeguard which will protect everybody involved: An appraisal. That's when a professional appraiser examines your home to ensure it's actually worth what your mortgage company is lending you. In many cases, the appraisal occurs after you've had your home checked by a professional inspector. So, if the inspection's okay, why this second check? Here's how it works:

Like your inspector, the appraiser may notice major structural problems like cracks in the foundation or roofing deficiencies. But primarily, the appraiser is measuring the home, considering its location, and doing something else that's very important to your lender and you. Your appraiser is verifying the home's value by comparing its selling price to the recent sale price of comparable homes nearby. The appraiser factors in any special features which add value, like a swimming pool. Your prospective home will even be appraised if it's brand new. Again, the appraiser is ensuring the sale price is reasonable. Depending where you live, an appraisal will cost you about $325 and will be figured into your closing costs. It's money well spent on a little peace of mind for you and your lender.

I'm Michael Holigan - About the House.