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 (PIW) on your application. The PIW program, started by Fannie Mae in 2017, allows you to be approved for a mortgage without needing an appraisal at all. It's a newer concept, and some lenders love it. But what drove it, and what risks are there for you? 
How do Property Inspection Waivers work?Basically, the value of your home is established by your lender. They determine its value automatically on a computer, using an online database from Fannie Mae in lieu 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 a pile of previously collected information. Get your appraisal from Treffer Appraisal Group, today Get a quote nowWho is qualified for a PIW?The program is limited right now, but it's being built continually to include more transaction types. Your home needs to have entries in Fannie Mae's electronic database, so homes that 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 do lenders use Property Inspection Waivers?The waiver cancels out appraisal expenses, and it can considerably shorten closing time for buyers. On the surface, this process sounds like a good deal — but there's a bottom line you'll want to recognize. With a PIW, your lender is NOT held liable if the assessment ends up wrong. That's an added bonus for lenders, but presents zero protection to the buyer whatsoever. What could happen if I accept a PIW?The information in Fannie Mae's database is pulled from past appraisals completed by professional appraisers. it might be accurate to a degree, but by definition, it won't 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 and/or damages could certainly be missed by the system. Due to these shortcomings, you can imagine an instance where your property is priced too high by the computer program evaluating it. If that happens, you could run into problems when it's time to put it back on the market. You could end up settling for 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 appraisal usually costs a few hundred dollars, but it could save you a lot more in the future. With a PIW, there's simply no guarantee you're getting an honest valuation of a premium asset. Treffer Appraisal Group, can help. Buying or refinancing a house is a big decision with big consequences. You should know without a doubt that you're getting a fair deal, and working with a licensed appraiser is the safest way to go. Computers and algorithms are in almost 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. |