The purpose of a home appraisal is to establish the fair market value of a home. It confirms for both you and your mortgage lender that the agreed price of the property is reasonable. An appraisal also ensures that a borrower is within loan-to-value guidelines. When an appraisal comes in low, the buyer may need to increase their down payment to qualify for the home loan. Furthermore, in some states, home appraisals may be used to calculate property taxes.