Don't risk your investment with a Property Inspection WaiverIf you're buying or refinancing a home, your lender may give you the option to use a Property Inspection Waiver (PIW) on your application. The program, initiated by Fannie Mae in 2017, allows you to be approved for a mortgage without needing an appraisal. It's a newer concept, and some lenders love it. But what prompted the change, and what are the risks for you? 
How do Property Inspection Waivers work?Essentially, your lender decides what your house is worth. They determine the value automatically on a computer, using an online database from Fannie Mae rather than hiring a local appraiser to personally inspect the home you're getting ready to buy. So, rather than a firsthand evaluation, lenders rely solely on computer processes to sift through a pile of previously collected data. Get your appraisal from Cloudview Appraisals, Inc. today Get a quote todayWho is eligible for a Property Inspection Waiver?The program's limited currently, but it is including more types of transactions continuously. Your property needs to have records in Fannie Mae's electronic database, so homes that have never been appraised aren't eligible for a Property Inspection Waiver. What's more, you need to have an excellent credit score and high assets for approval. Why do lenders use Property Inspection Waivers?The waiver removes appraisal charges, and it can substantially pare down closing time for buyers. Outwardly, this process sounds like a good deal — but there's a bottom line you will want to consider. With a PIW, your lender is NOT liable if the assessment is wrong. That's an added bonus for lenders, but a disadvantage to the home buyer. What could go wrong?The information in Fannie Mae's database is pulled from previous appraisals done by professional appraisers. it might be somewhat accurate, 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 valuation of your home, new improvements, renovations, or damages could certainly be neglected by the system. Due to these shortcomings, you can imagine an instance where your home is valued too high by the computer program evaluating it. If that happens, you could run into problems when it's time to sell. You might 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 is the bottom line?A definitive appraisal usually costs a few hundred dollars, but it can save you a great deal more in the long run. With a Property Inspection Waiver, there is simply no guarantee that you're receiving an honest valuation of your most expensive asset. Cloudview Appraisals, Inc. can help. Buying or refinancing a house is a big decision with grand consequences. You should know with certainty 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 precise than the careful assessment of a licensed professional you trust. |