Don't risk your home with a Property Inspection WaiverIf you're getting a loan for a home, your lender may give you the option to use a Property Inspection Waiver (PIW) on your loan application. The waiver program, begun by Fannie Mae in 2017, allows you to be approved for a mortgage without an appraisal. It's a relatively new concept, and some lenders love it. But what drove the change, and what are the risks for you as a home buyer? 
How do Property Inspection Waivers work?Basically, your lender decides what your house is worth. They determine the value automatically on a computer, using a database from Fannie Mae in lieu of hiring a local appraiser to personally inspect the home you're about to buy. So, rather than a manual evaluation, lenders rely on computer processes to sort through a bank of previously collected data. Get your appraisal from Residential Appraisal Service, LLC today Get a quote todayWho can get a PIW?The program's limited right now, but it's progressively building to include more types of transactions. Your home has to have records in Fannie Mae's electronic database, so homes which have never been appraised are not eligible for a PIW. What's more, you must have an excellent credit score and high assets to be approved. Why do lenders use Property Inspection Waivers?The waiver cancels out appraisal fees, and it can trim closing time considerably for buyers. Outwardly, this process seems like a good deal — but there's a bottom line you'll want to consider. With a PIW, your lender is NOT held liable if the assessment turns out to be wrong. That's a bonus for lenders, but presents zero protection to the home buyer. What could go wrong?The information in Fannie Mae's database is derived from previous appraisal reports completed by professional appraisers. it might be somewhat accurate, but it won't necessarily be a current evaluation of the exterior and interior quality in a building that changes over time. Without a professional valuation of your home, recent improvements and/or damages can easily be overlooked by the system. Due to these deficiencies, you can imagine a situation where your property is valued too high by the computer program evaluating it. If that happens, you could run into issues when it's time to sell. You could wind up settling for far less than you paid, and you'll have no recourse against your lender when the money starts adding up. What is the bottom line?An accurate appraisal usually costs a few hundred dollars, but it can save you a substantial amount more in the future. With a Property Inspection Waiver, there's no guarantee that you're getting an honest valuation of a premium asset. Residential Appraisal Service, LLC can help. Buying or refinancing a home is a big decision with grand consequences. You need to know with certainty that you're getting a fair deal, and working with a licensed appraiser is the safest move you can make. Computers and algorithms have assumed a place in almost every area of modern life, but when it comes to measuring the value of your property, nothing is more precise than the careful examination of a licensed professional you trust. |