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 application. The program, introduced by Fannie Mae in 2017, allows you to be approved for a mortgage without getting an appraisal at all. It's a newer concept, and some lenders love it. But what prompted the change, and what are the associated risks? 
How does a Property Inspection Waiver work?Essentially, what your home is worth is established by your lender. They determine its value systematically on a computer, employing a database from Fannie Mae instead of hiring a local appraiser to inspect the home you're about to buy. So, rather than a manual evaluation, lenders rely solely on computer algorithms to sort through an array of previously collected information. Get your appraisal from Lake Area Appraisal Firm today Get a quote onlineWho can get a Property Inspection Waiver?The program's limited currently, but it is including more types of transactions regularly. Your home has to have entries in Fannie Mae's electronic database, so homes that have never been appraised aren't eligible for a PIW. Additionally, you're required to have an excellent credit score and high assets to be approved. Why do lenders use it?The waiver removes appraisal expenses, and it can considerably pare down closing time for buyers. Outwardly, this streamlined process sounds like a good deal — but there's a bottom line you'll want to recognize. With a PIW, your lender is NOT held responsible if the assessment is wrong. That's great for lenders, but terrible for the buyer. What could happen if I agree to a Property Inspection Waiver?The information in Fannie Mae's database is pulled from past appraisal reports done by professional appraisers. This data might be somewhat accurate, but it won't necessarily be a current evaluation of the exterior and interior quality in a building that changes from year by year. Without a professional valuation of your home, recent improvements and/or damages could absolutely be omitted by the system. Because of these deficiencies, it's easy to imagine a situation where your property is valued too high by the system evaluating it. If that happens, you could run into snags when it's time to put it back on the market. You might not be able to get what you paid for it, and you'll have no recourse against your lender when the money falls short. What is the bottom line?An accurate appraisal usually costs a few hundred dollars, but it could save you a great deal more in the future. With a Property Inspection Waiver, there's simply no guarantee that you're receiving an honest valuation of your most expensive asset. Lake Area Appraisal Firm can help. Buying or refinancing a home is a big decision with big consequences. You should know without a doubt that you're receiving a fair deal, and working with a licensed appraiser is the safest move you can make. Computers and algorithms have assumed a place in nearly 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. |