Don't risk your investment with a Property Inspection WaiverIf 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 waiver program, started by Fannie Mae in 2017, allows you to move forward with your mortgage without an appraisal at all. It's a relatively new concept, and some lenders love it. But what drove the change, and what risks are there for you? 
How do PIWs work?Essentially, determining how much your house is worth falls into the hands of your lender. They determine the value automatically on a computer, employing a database from Fannie Mae instead of hiring a local appraiser to personally inspect the property you're about to buy. So, rather than a manual evaluation, lenders rely solely on computer methods to sift through a pile of previously collected information. Get your appraisal from Integrity Appraisal Services today Get a quote onlineWho can get a PIW?The program is currently limited, but it is including more types of transactions continuously. Your property has to have records in Fannie Mae's electronic database, so homes which have never been appraised are not eligible for a PIW. What's more, you're required to have an excellent credit score and high assets to be approved. Why is a Property Inspection Waiver applied?The waiver omits appraisal charges, and it can considerably pare down closing time for buyers. On the surface, this process seems like a bargain — but there's a crucial point you'll want to keep in mind. With a PIW, your lender is NOT held responsible if the valuation winds up being wrong. That's great for lenders, but affords zero protection to the home buyer. Is there anything that could go wrong?The information in Fannie Mae's database is pulled from previous appraisals done by professional appraisers. it might be relatively accurate, but it won't necessarily be a current evaluation of the quality of a building that changes over time. Without a professional appraisal of your home, new improvements, remodels, or damages could certainly be missed by the system. Due to these shortcomings, it's easy to imagine a scenario where your home is priced too high by the program assessing it. If that happens, you could run into issues when it's time to put it back on the market. You may not be able to get what you paid for it, and you'll have no recourse against your lender when the money starts adding up. What's the bottom line?A definitive appraisal typically costs a few hundred dollars, but it can save you thousands (or tens of thousands) in the long run. With a PIW, there's simply no guarantee you're getting an honest valuation of your most expensive asset. Integrity Appraisal Services 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 move you can make. 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 examination of a licensed professional you trust. |