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 application. The program, introduced by Fannie Mae in 2017, allows you to move forward with your mortgage without needing an appraisal at all. It's a relatively new concept, and some lenders love it. But what drove it, and what risks are associated? 
How do PIWs work?Basically, the task of deciding what your house is worth falls into the hands of your lender. They determine the value systematically on a computer, using a database from Fannie Mae instead of hiring a local appraiser to personally inspect the property you're getting ready to buy. So, rather than a manual evaluation, lenders rely on computer processes to sort through a bank of previously collected data. Get your appraisal from Premier Appraisal Services of Tallahassee, LLC today Get a quote nowWho can receive a Property Inspection Waiver?The program is currently limited, but it's including more transaction types regularly. Your property needs to have entries in Fannie Mae's electronic database, so homes which have never been appraised aren't eligible for a Property Inspection Waiver. Additionally, you're required to have an excellent credit score and high assets for approval. Why is it applied?The waiver removes appraisal charges, and it can shorten closing time substantially for buyers. At first glance, this simplified process sounds like a good deal — but there's a bottom line you'll want to consider. With a PIW, your lender is NOT liable if the valuation ends up wrong. That's a benefit to lenders, but awful for the buyer. Is there anything that could go wrong?The information in Fannie Mae's database is derived from previous appraisal reports completed by professional appraisers. it might be somewhat accurate, but it won't necessarily 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 could absolutely be left out by the system. Due to these deficiencies, you can imagine an instance where your property is valued too high by the computer program evaluating it. If that happens, you could run into problems when it's time to list it for sale. You could wind up settling for less than you paid, and you'll have no recourse against your lender when the money falls short. What's the bottom line?An accurate appraisal usually costs a few hundred dollars, but it could save you thousands (or tens of thousands) in the long run. With a Property Inspection Waiver, there's clearly no guarantee that you're receiving an honest valuation of a premium asset. Premier Appraisal Services of Tallahassee, LLC can help. Buying or refinancing a home 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 smartest move you can make. 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 accurate than the careful examination of a licensed professional you trust. |