Don't risk your investment with a Property Inspection WaiverIf you're getting a loan for a home, your lender might give you the option to use a Property Inspection Waiver – or PIW – on your loan application. The waiver program, initiated by Fannie Mae in 2017, allows you to be approved for a mortgage without needing an appraisal. It's a newer concept, and some lenders love it. But what motivated it, and what risks are there for you? 
How does a Property Inspection Waiver work?Basically, your lender decides what your home is worth. They determine its value systematically on a computer, employing an online database from Fannie Mae instead of hiring a local appraiser to personally inspect the property you're getting ready to buy. So, rather than a hands-on evaluation, lenders rely on computer processes to sort through a pile of previously collected data. Get your appraisal from Lake Country Appraisals today Get a quote onlineWho is qualified for a PIW?The program's limited currently, but it's including more transaction types regularly. Your home needs to have records in Fannie Mae's electronic database, so homes which have never been appraised aren't eligible for a Property Inspection Waiver. What's more, you're required to have an excellent credit score and high assets for approval. Why do lenders use Property Inspection Waivers?The waiver removes appraisal charges, and it can cut closing time substantially for buyers. At first glance, this streamlined process seems like a bargain — but there's a key point you will want to consider. With a PIW, your lender is NOT held responsible if the assessment ends up wrong. That's a benefit to lenders, but awful for the buyer. What could go wrong if I accept a Property Inspection Waiver?The information in Fannie Mae's database is pulled from past appraisal reports completed by professional appraisers. it might be accurate to a degree, but by definition, it won't be an up-to-date evaluation of the quality of a building that's constantly changing. Without a professional valuation of your home, recent improvements and/or damages can easily be left out by the system. Because of these deficiencies, you can imagine a scenario where your home is valued too high by the system evaluating it. If that happens, you could run into problems when it's time to sell. You could wind up settling for less than you paid, and you'll have no recourse against your lender when the money falls short. What's the bottom line?An accurate appraisal usually costs a few hundred dollars, but it can save you thousands (or tens of thousands) in the future. With a Property Inspection Waiver, there's absolutely no guarantee you're receiving an honest valuation of a premium asset. Lake Country Appraisals can help. Buying or refinancing a house is a big decision with grand consequences. You should know without a doubt that you're getting a fair deal, and working with a licensed appraiser is the smartest move you can make. Computers and algorithms are in nearly 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. |