Don't risk your home 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 (PIW) on your application. The PIW program, introduced 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 caused it, and what risks are associated? 
How does a PIW work?Basically, what your home is worth is established by your lender. They determine the value automatically on a computer, using a 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 manual evaluation, lenders rely solely on computer processes to sort through an array of previously collected information. Get your appraisal from The Appraisal Group, Inc. today Who can get a Property Inspection Waiver?The program is currently limited, but it's expanding regularly to include more transaction types. 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. Additionally, you must have an excellent credit score and high assets to be approved. Why is a Property Inspection Waiver applied?On the surface, this process seems like a good deal — but there's a crucial point you'll want to recognize. With a PIW, your lender is NOT held responsible if the valuation is wrong. That's an added bonus for lenders, but presents no protection to the home buyer. You will also be charged for this service within your closing costs. What could happen if I agree to a Property Inspection Waiver?The information in Fannie Mae's database is derived from past appraisals completed in the area. This data might be relatively accurate, but it won't necessarily be a current evaluation of the quality of a building that's constantly changing. Without a professional appraisal of your home, recent improvements and/or damages could easily be neglected by the system. Due to these shortcomings, it's easy to imagine a scenario where your home is valued too high or to low by the computer program assessing it. If that happens, you could run into snags 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?An accurate appraisal typically costs a few hundred dollars, but it can save you a substantial amount more in the future. With a PIW, there is no guarantee you're receiving an honest valuation of your most expensive asset. The Appraisal Group, Inc. can help. Buying or refinancing a home is a big decision with grand consequences. You demand to know with certainty 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 accurate than the careful assessment of a licensed professional you trust. |