Verification of your on-time payment history via your credit score will be a large factor in qualifying for your mortgage, but due to the hefty size of most home loans, banks require a little extra security. The appraisal comes in as your lender's extra insurance that he won't lose money on your loan ? something most banks aren't fond of.
The appraisal serves to guarantee that the house will sell for enough to cover the cost of your loan in the unfortunate event that you default on your mortgage. In this case, the bank's last option is usually a foreclosure, in which they sell your house to recoup those losses, so it's important to them that they're able to get a decent price.
An appraisal will usually cost less than four hundred dollars, comprising of either a comparison of your potential home with similar houses in the neighborhood, or an evaluation of the property's replacement cost plus a decent estimate of the land's value if your house is new. Updated appliances, plumbing, electrical work, roofing, windows, landscaping, and more can all improve your appraisal.
An appraisal affects your bank's profits so they should be carefully directing the process, preventing any mistakes from being made. But in case some choice is left to your discretion, make sure your appraisal is done by one of your lender's approved appraisers to prevent any appraisal-rejection issues.