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 loan application. The PIW program, started by Fannie Mae in 2017, allows you to be approved for a mortgage without getting an appraisal at all. It's a newer concept, and some lenders love it. But what determined the change, and what risks are there for you? 
How do PIWs work?Essentially, what your home is worth is determined by your lender. They determine the value systematically on a computer, using a database from Fannie Mae instead of hiring a local appraiser to inspect the home you're getting ready to buy. So, rather than a firsthand evaluation, lenders rely solely on computer processes to sort through a bank of previously collected data. Get your appraisal from Southern Appraisal Network, Inc. today Get a quote onlineWho's qualified for a Property Inspection Waiver?The program is limited currently, but it is including more transaction types continuously. Your home has to have entries in Fannie Mae's electronic database, so homes which have never been appraised are not eligible for a Property Inspection Waiver. Additionally, you're required to have an excellent credit score and high assets for approval. Why is a PIW used?The waiver omits appraisal expenses, and it can trim closing time considerably for buyers. Outwardly, this simplified process seems like a bargain — but there's a bottom line you will want to recognize. With a PIW, your lender is NOT held responsible if the assessment turns out to be wrong. That's great for lenders, but awful for the home buyer. Could anything go wrong?The information in Fannie Mae's database is derived from previous appraisals done by professional appraisers. This data might be accurate to some extent, but it won't necessarily be an up-to-date evaluation of the exterior and interior quality in a building that's regularly changing. Without a professional appraisal of your home, recent improvements, remodels, or damages can certainly be neglected by the system. Because of these shortcomings, it's easy to imagine a situation where your property is priced too high by the computer program evaluating it. If that happens, you could run into issues when it's time to put it back on the market. You could end up settling for far less than you paid, and you'll have no recourse against your lender when the money falls short. What is the bottom line?A definitive appraisal usually costs a few hundred dollars, but it could save you a lot more in the long run. With a Property Inspection Waiver, there is no guarantee you're getting an honest valuation of a premium asset. Southern Appraisal Network, Inc. can help. Buying or refinancing a house is a big decision with grand consequences. You need to know without a doubt that you're receiving a fair deal, and working with a licensed appraiser is the smartest action you can take. 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 examination of a licensed professional you trust. |