Are Property Inspection Waivers worth the risk?If you are buying or refinancing a home, your lender may give you the option to use a Property Inspection Waiver (PIW) on your application. The waiver program, started by Fannie Mae in 2017, allows you to be approved for a mortgage without an appraisal. It's a newer concept, and some lenders love it. But what determined the change, and what are the risks for you as a home buyer? 
How does a Property Inspection Waiver work?Basically, what your home is worth is established by your lender. They determine the value systematically on a computer, employing a database from Fannie Mae rather than hiring a local appraiser to inspect the property you're getting ready to buy. So, rather than a firsthand evaluation, lenders rely on computer methods to sort through an array of previously collected information. Get your appraisal from Precise Home Appraisals, LLC today Get a quote nowWho can get a PIW?The program is limited right now, but it is including more types of transactions continuously. Your property has to have records in Fannie Mae's electronic database, so homes which have never been appraised are not eligible for a Property Inspection Waiver. Additionally, you must have an excellent credit score and high assets to be approved. Why is a PIW used?The waiver cancels out appraisal expenses, and it can substantially reduce closing time for buyers. At first glance, this simplified process sounds like a good deal — but there's a bottom line you'll want to consider. With a PIW, your lender is NOT held responsible if the valuation winds up being wrong. That's a bonus for lenders, but offers no protection to the home buyer whatsoever. Could anything go wrong?The information in Fannie Mae's database is pulled from past appraisals done by professional appraisers. it might be somewhat accurate, but by definition, it will not be an up-to-date assessment of the quality of a building that changes over time. Without a professional valuation of your home, new improvements and/or damages can certainly be left out by the system. Due to these shortcomings, you can imagine an instance where your home 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 may not be able to receive what you paid for it, and you'll have no recourse against your lender when the money falls short. What's the bottom line?A definitive appraisal typically costs a few hundred dollars, but it could save you thousands in the long run. With a Property Inspection Waiver, there's simply no guarantee that you're getting an honest valuation of a premium asset. Precise Home Appraisals, LLC can help. Buying or refinancing a home is a big decision with big consequences. You demand to know without a doubt that you're getting a fair deal, and working with a licensed appraiser is the safest action you can take. 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 precise than the careful examination of a licensed professional you trust. |