Is a Property Inspection Waiver worth the risk?If 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 waiver program, initiated by Fannie Mae in 2017, allows you to move forward with your mortgage without an appraisal at all. It's a newer concept, and some lenders love it. But what drove the change, and what risks are there for you as a home buyer? 
How does a Property Inspection Waiver work?Basically, deciding how much your property is worth falls into the hands of your lender. They determine the value automatically on a computer, using a database from Fannie Mae in lieu of hiring a local appraiser to inspect the home you're getting ready to buy. So, rather than a hands-on evaluation, lenders rely on computer processes to sift through an array of previously collected data. Get your appraisal from Assured Appraisals, LLC. today Get a quote todayWho's qualified for a PIW?The program's limited right now, but it's including more transaction types regularly. Your property has to have entries in Fannie Mae's electronic database, so homes that have never been appraised aren't eligible for a Property Inspection Waiver. Additionally, you need to have an excellent credit score and high assets to be approved. Why do lenders use PIWs?The waiver removes appraisal fees, and it can trim closing time considerably for buyers. Outwardly, this simplified process seems like a good deal — but there's a key point you'll want to keep in mind. With a PIW, your lender is NOT liable if the valuation winds up being wrong. That's an added bonus for lenders, but presents zero protection to the home buyer. What could happen if I accept a Property Inspection Waiver?The information in Fannie Mae's database is derived from previous appraisal reports done by professional appraisers. This data might be accurate to a degree, but by definition, it will not be an up-to-date evaluation of the exterior and interior quality in a building that changes over time. Without a professional appraisal of your home, recent improvements and/or damages could certainly be omitted by the system. Because of these deficiencies, you can imagine an instance where your property is valued too high by the program assessing 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 starts adding up. What's the bottom line?An accurate, professional appraisal usually costs a few hundred dollars, but it can save you thousands (or tens of thousands) in the long run. With a PIW, there is simply no guarantee that you're receiving an honest valuation of a premium asset. Assured Appraisals, LLC. can help. Buying or refinancing a house is a big decision with grand consequences. You should know without a doubt that you're receiving a fair deal, and working with a licensed appraiser is the safest way to go. 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 accurate than the careful assessment of a licensed professional you trust. |