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 program, started by Fannie Mae in 2017, allows you to move forward with your mortgage without an appraisal. It's a relatively new concept, and some lenders love it. But what caused the change, and what risks are associated? 
How does a PIW work?Essentially, your lender decides what your property is worth. They determine its value systematically 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 hands-on evaluation, lenders rely entirely on computer methods to sift through a trove of previously collected information. Get your appraisal from Astute Appraisals, Inc. today Get a quote nowWho's qualified for a Property Inspection Waiver?The program is currently limited, but it is being expanded continually to include more transaction types. Your home has to have entries 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 charges, and it can shorten closing time considerably for buyers. At first glance, this streamlined process sounds like a bargain — but there's a crucial point you'll want to keep in mind. With a PIW, your lender is NOT held responsible if the valuation is wrong. That's a benefit to lenders, but a disadvantage to the buyer. What could go wrong if I accept a PIW?The information in Fannie Mae's database is pulled from previous appraisal reports completed by professional appraisers. it might be somewhat accurate, but by definition, it will not be a current evaluation of the quality of a building that's regularly changing. Without a professional appraisal of your home, recent improvements, renovations, or damages could certainly be missed by the system. Because of these shortcomings, it's easy to imagine a situation where your home is priced too high by the system evaluating it. If that happens, you could run into problems when it's time to sell. You might not be able to receive 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 appraisal usually costs a few hundred dollars, but it could save you thousands (or tens of thousands) in the long run. With a Property Inspection Waiver, there is no guarantee that you're receiving an honest valuation of your most expensive asset. Astute Appraisals, Inc. can help. Buying or refinancing a home is a big decision with big consequences. You need to 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 are in almost every area of modern life, but when it comes to measuring the value of your home, nothing is more accurate than the careful examination of a licensed professional you trust. |