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 – or PIW – on your loan application. The PIW program, begun by Fannie Mae in 2017, allows you to move forward with your mortgage without getting an appraisal at all. It's a relatively new concept, and some lenders love it. But what drove the change, and what risks are associated? 
How does a Property Inspection Waiver work?Basically, what your home is worth is determined by your lender. They determine the value automatically on a computer, using an online database from Fannie Mae instead of hiring a local appraiser to inspect the home you're about to buy. So, rather than a firsthand evaluation, lenders rely entirely on computer processes to sort through an array of previously collected data. Get your appraisal from Appraisals of Southwest Florida today Get a quote todayWho is eligible for a Property Inspection Waiver?The program is limited currently, but it is being built continually to include more types of transactions. Your property has 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 need to have an excellent credit score and high assets to be approved. Why is a Property Inspection Waiver used?The waiver removes appraisal charges, and it can considerably reduce closing time for buyers. Outwardly, this streamlined process seems like a bargain — but there's a bottom line you will want to recognize. With a PIW, your lender is NOT held liable if the valuation is wrong. That's a benefit to lenders, but awful for the home buyer. What could happen if I agree to a PIW?The information in Fannie Mae's database is pulled from previous appraisal reports completed by professional appraisers. This data might be accurate to a degree, but by definition, it will not be a current assessment of the exterior and interior quality in a building that changes over time. Without a professional appraisal of your home, new improvements and/or damages can absolutely be neglected by the system. Because of these shortcomings, you can imagine an instance where your home is valued too high by the program assessing it. If that happens, you could run into snags when it's time to list it for sale. You may not be able to receive 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 could save you a lot more in the long run. With a PIW, there's no guarantee that you're getting an honest valuation of a premium asset. Appraisals of Southwest Florida can help. Buying or refinancing a property is a big decision with grand consequences. You should know with certainty that you're receiving a fair deal, and working with a licensed appraiser is the safest action you can take. Computers and algorithms are in nearly every area of modern life, but when it comes to measuring the value of your property, nothing is more precise than the careful assessment of a licensed professional you trust. |