Don't risk your investment with a Property Inspection WaiverIf you are buying or refinancing a home, your lender might give you the option to use a Property Inspection Waiver – or PIW – on your application. The waiver program, begun by Fannie Mae in 2017, allows you to be approved for a mortgage without an appraisal at all. It's a relatively new concept, and some lenders love it. But what prompted the change, and what are the risks for you as a home buyer? 
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 an online 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 firsthand evaluation, lenders rely entirely on computer algorithms to sort through a bank of previously collected information. Get your appraisal from Real Value Review, LLC ~541-282-3866~ today Get a quote nowWho can receive a Property Inspection Waiver?The program's currently limited, but it is including more transaction types regularly. Your home has to have entries in Fannie Mae's electronic database, so homes that 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 is a PIW used?The waiver omits appraisal charges, and it can substantially reduce closing time for buyers. At first glance, this streamlined process sounds like a bargain — but there's a crucial point you'll want to recognize. With a PIW, your lender is NOT held responsible if the valuation winds up being wrong. That's great for lenders, but terrible for the home buyer. Is there anything that could go wrong?The information in Fannie Mae's database is pulled from previous appraisals completed by professional appraisers. This data might be somewhat accurate, but it won't necessarily be an up-to-date assessment of the exterior and interior quality in a building that's constantly changing. Without a professional valuation of your home, recent improvements, renovations, or damages could easily be omitted by the system. Due to these deficiencies, it's easy to imagine a situation where your property is priced too high by the program assessing it. If that happens, you could run into issues when it's time to list it for sale. You could wind up getting less than you paid, and you'll have no recourse against your lender when the money starts adding up. What is the bottom line?An accurate, professional appraisal typically costs a few hundred dollars, but it can save you a great deal more in the long run. With a Property Inspection Waiver, there's no guarantee you're getting an honest valuation of a premium asset. Real Value Review, LLC ~541-282-3866~ can help. Buying or refinancing a home 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 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 home, nothing is more precise than the careful assessment of a licensed professional you trust. |