Don't risk your investment with a Property Inspection WaiverIf you are getting a loan for a home, your lender may give you the option to use a Property Inspection Waiver – or PIW – on your loan application. The program, started by Fannie Mae in 2017, allows you to move forward with your mortgage without an appraisal at all. It's a newer concept, and some lenders love it. But what motivated it, and what are the risks for you? 
How do Property Inspection Waivers work?Essentially, your lender decides what your house is worth. They determine its value automatically on a computer, employing an online database from Fannie Mae instead of hiring a local appraiser to inspect the property you're about to buy. So, rather than a manual evaluation, lenders rely on computer methods to sift through an array of previously collected data. Get your appraisal from Metro Appraisals today Get a quote nowWho is qualified for a Property Inspection Waiver?The program's limited currently, but it is including more transaction types continuously. Your property needs to have entries in Fannie Mae's electronic database, so homes that have never been appraised aren't eligible for a PIW. Additionally, you must have an excellent credit score and high assets to be approved. Why is a PIW used?The waiver eliminates appraisal charges, and it can substantially reduce closing time for buyers. On the surface, this streamlined process seems like a good deal — but there's a bottom line you'll want to consider. With a PIW, your lender is NOT held liable if the assessment is wrong. That's great for lenders, but affords zero protection to the buyer whatsoever. Is there anything that could go wrong?The information in Fannie Mae's database is derived from past appraisal reports done by professional appraisers. This data might be relatively accurate, but by definition, it will not be an up-to-date evaluation of the exterior and interior quality in a building that changes from year to year. Without a professional appraisal of your home, recent improvements and/or damages could absolutely be neglected by the system. Due to these deficiencies, it's easy to imagine a situation where your home is valued too high by the program evaluating it. If that happens, you could run into snags when it's time to sell. You might 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?An accurate appraisal typically costs a few hundred dollars, but it could save you a substantial amount more in the long run. With a PIW, there's clearly no guarantee you're receiving an honest valuation of your most expensive asset. Metro Appraisals 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 safest move you can make. 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 precise than the careful examination of a licensed professional you trust. |