Property Inspection Waivers: Worth the risk?If you're buying or refinancing a home, your lender might give you the option to use a Property Inspection Waiver – or PIW – on your loan application. The program, begun 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 determined the change, and what risks are there for you? 
How does a PIW work?Basically, what your home is worth is established by your lender. They determine its value systematically on a computer, using an online database from Fannie Mae rather than hiring a local appraiser to inspect the property you're about to buy. So, rather than a hands-on evaluation, lenders rely on computer algorithms to sift through a bank of previously collected information. Get your appraisal from Windham Real Property Appraisals, LLC today Get a quote onlineWho can get a Property Inspection Waiver?The program's currently limited, but it is including more transaction types continuously. Your home needs to have entries in Fannie Mae's electronic database, so homes which have never been appraised are not eligible for a Property Inspection Waiver. What's more, you must have an excellent credit score and high assets to be approved. Why is a PIW used?The waiver eliminates appraisal expenses, and it can cut closing time substantially for buyers. Outwardly, this streamlined process sounds like a bargain — but there's a key point you will want to keep in mind. With a PIW, your lender is NOT held liable if the valuation winds up being wrong. That's great for 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 done by professional appraisers. it might be somewhat accurate, but it won't necessarily be a current evaluation of the exterior and interior quality in a building that's constantly changing. Without a professional appraisal of your home, new improvements and/or damages can certainly be neglected by the system. Due to these deficiencies, you can imagine a situation where your home is valued too high by the computer program assessing 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 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 future. With a Property Inspection Waiver, there is absolutely no guarantee you're receiving an honest valuation of a premium asset. Windham Real Property Appraisals, LLC can help. Buying or refinancing a home is a big decision with big consequences. You should know with certainty that you're getting a fair deal, and working with a licensed appraiser is the smartest way to go. Computers and algorithms have assumed a place in nearly 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. |